Measuring Financial Stability in Emerging Economies and Lessons for Viet Nam

Abstract

Since 1990s, the international organizations has mentioned the important role of financial stability for the economy, however, this target has been perceived by policy makers after the 2008 global financial crisis. The organizations in terms of International Monetary Fund (IMF), European Central Bank (ECB) and Asian Development Bank (ADB) have provided several set of indicators as guidance on measuring financial uncertainty. Nevertheless, each country has different economics, political and financial conditions, the financial indicators should be customized to satisfy specific requirements. This paper focus to anlyze the experience of two emerging markets, namely South Korea and Indonesia, in measuring financial stability. By doing this, the author draws some lesson for Viet Nam in applying set of indicators and composite index approaches to estimate financial stability as well as prequisite criteria for indicator selection.