MACROPRUDENTIAL ANALYSIS

A comprehensive economic analysis that evaluates the health, soundness, and vulnerabilities of a financial system such as a nation’s banking industry. To help measure the system’s sensitivity to economic shocks, this method performs tests and scenario analysis. Macroeconomic and market data are also assessed to figure out the health of the present system. And to get more sense of the system’s strength and vulnerabilities, it studies the qualitative data related to financial institutions’ frameworks and the regulatory environment.

Asset prices, balance of payments, exchange rates, Gross Domestic Product (GDP) growth rates, inflation, interest rates, and the correlation of markets within the system are some of the macroeconomic data used in this analysis.

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