Monitoring of systemic risks

Financial crises affect the overall economy and welfare. The most recent financial crisis was the crisis that developed into a systemic crisis in the autumn of 2008. Within a short period of time, large parts of the global financial system collapsed, and together with the ensuing uncertainty the crisis resulted in a considerable loss of welfare.

Systemic financial crises must be expected to occur on a regular basis in the future as well. The Systemic Risk Council, which was established after the recent financial crisis, is among other things tasked to warn about future financial crises. Monitoring of systemic risks is a key aspect of the work performed by the Council.

Identifying systemic risks is complex and future crises will probably be different from past crises, but no doubt certain characteristics will be the same, such as unsustainably strong credit growth. The Systemic Council monitors the build-up of systemic risks from different angles in six monitoring blocks. Within each block, it is assessed whether underlying forces may be contributing to systemic risks building up. For details on the Council's monitoring of systemic risks see the note Monitoring of systemic risks