The OFR Financial System Vulnerabilities Monitor

This paper describes the purpose, construction, interpretation, and use of the OFR Financial System Vulnerabilities Monitor. The monitor, a heat map of 58 quantitative indicators, is a starting point for assessing vulnerabilities in the U.S. financial system. The OFR launched the monitor in 2017 to help fulfill its mandate to measure and monitor risks to U.S. financial stability. (Working Paper no. 18-01)

Abstract

The Office of Financial Research (OFR) has a mandate to measure and monitor risks to U.S. financial stability. To help fulfill that mandate, the OFR launched the Financial System Vulnerabilities Monitor (FSVM) in 2017. The monitor is a starting point for assessing vulnerabilities in the U.S. financial system. It is constructed as a heat map of 58 quantitative indicators. It is designed to provide early warning signals of potential financial system vulnerabilities that merit investigation. This paper details the monitor’s purpose, construction, interpretation, and use.