Bank of Finland paper tests financial stability model

A Bank of Finland paper published on Wednesday creates a model that maps the state of financial stability in the economy and identifies sources of systemic risks.

Peter Sarlin and Tuomas Peltonen, the paper's authors, use a self-organising map that untangles individual sources of vulnerabilities in the financial system and predicts the likelihood of financial crises taking place.

The authors say the model can be used to monitor financial stability by locating a country in the financial stability

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