GRA · Financial Stability

Spatial financeWhere capital meets hazard, exposure and transition

Financial Stability

System-wide vulnerabilities, contagion, nonbank intermediation and institutional recovery questions. Financial Stability is an established platform of The Global Risks Alliance.

STEM methods
5
Canonical methods this field applies
Topics
8
Subject pages in the field
Counterparts
6
Platforms in shared fields across the network
Report series
2
Reports series it contributes to
01Canvas

How the work runs.

Systems · around this subjectIllustrative

Systemic risk dashboard

Financial system · Committee meeting 3

Housing vulnerabilities elevatedGRA · Financial Stability

Vulnerabilities heat map

percentile vs history, 0 to 100

Exposure network

red: most connected node

Credit-to-GDP gap

Systemic risk dashboard: the screen’s structure, terms and states for Financial system.Example names and illustrative values; a design, not a record or a live system.

Fig.Systemic risk dashboard: example names and illustrative values, not a record or a live system.

02Frameworks

What the work is read against.

The platform does not set standards. It reads its evidence against the frameworks that competent bodies have adopted, so a finding can be placed where a decision-maker already works.

Framework or standardBodyWhat it sets
Basel III frameworkBasel Committee on Banking Supervision (BCBS)Capital, leverage and liquidity standards for banks, including the liquidity coverage ratio, net stable funding ratio and the framework for global systemically important banks
Key Attributes of Effective Resolution Regimes for Financial InstitutionsFinancial Stability Board (FSB)Powers and tools resolution authorities need to resolve failing firms without taxpayer support, including bail-in and cross-border cooperation
FSB work programme on nonbank financial intermediationFinancial Stability BoardPolicy recommendations on money market funds, open-ended fund liquidity, margining, liquidity preparedness for margin calls and leverage in nonbank intermediation
Principles for Financial Market InfrastructuresCPMI and IOSCOStandards for payment systems, central securities depositories, securities settlement systems, central counterparties and trade repositories
Holistic Framework for systemic risk in the insurance sectorInternational Association of Insurance Supervisors (IAIS)Supervisory policy measures, global monitoring and implementation assessment for systemic risk from insurance
Financial Sector Assessment ProgramInternational Monetary Fund and World BankIn-depth assessments of a country’s financial sector stability and development, mandatory for systemically important jurisdictions
IOSCO recommendations for liquidity risk management for collective investment schemesInternational Organization of Securities CommissionsExpectations for managing liquidity in open-ended funds, including liquidity management tools and anti-dilution measures
Macroprudential policy frameworkEuropean Systemic Risk Board and national macroprudential authoritiesCountercyclical capital buffers, systemic risk buffers, borrower-based measures and reciprocity of national measures
03Stress test

How a shock to assets becomes a system loss.

The equity the system loses after interbank contagion, against the initial hit, as leverage, interconnection and recovery rates change, the core of a macroprudential stress test. Teaching model with stated illustrative values, not a prediction.

Controls

Fall in external assets
2.0%
Leverage (assets over equity)
10 times
Interbank share of assets
10%
Recovery on interbank claims
40%
Banks in the system
20
Core banks
20% of banks

Readouts

Equity lost to the initial shock
18.0%
Equity lost after contagion
45.0%
Added by contagion (DebtRank)
27.0 points
Banks in default
0
Numbers, methods and sources
RoundSystem equity lost (%)Banks in default
018.000
128.800
235.280
339.170
441.500
542.900
643.740
744.240
844.550
944.730
1044.840
1144.900
1244.940
1344.960
1444.980
1544.990
1644.990
1745.000
1845.000
1945.000
2045.000
2145.000
2245.000
2345.000
2445.000
2545.000
2645.000
2745.000
2845.000
2945.000
3045.000

Methods

  1. DebtRank Battiston and others (2012), Scientific Reports 2:541
  2. Differential DebtRank Bardoscia and others (2015), PLOS ONE 10
  3. Contagion in financial networks Gai and Kapadia (2010), Proc. R. Soc. A 466
  4. Clearing in financial networks Eisenberg and Noe (2001), Management Science 47
  5. Uncertainty fan (parameter Monte Carlo) Spiegelhalter, Pearson and Short (2011), Visualising uncertainty about the future, Science 333
  6. One-at-a-time sensitivity (tornado) Saltelli and others (2008), Global Sensitivity Analysis: The Primer, Wiley

Data

No observed data enters this model: it runs on the teaching values set by the controls, to be replaced with a programme’s own evidence.

How a shock to assets becomes a system loss. Illustrative teaching model: it runs on the values set by the controls, not on measured data. Methods: DebtRank (Battiston and others (2012), Scientific Reports 2:541); Differential DebtRank (Bardoscia and others (2015), PLOS ONE 10); Contagion in financial networks (Gai and Kapadia (2010), Proc. R. Soc. A 466).
05Twin and cascade simulator

Trace a shock in Financial Stability to the balance sheet.

Assembled from the Nexus Standards area profile Financial stability and prudential risk: the shocks it names, the systems and sectors that carry the loss, the controls that dampen it and the data that observe it. Pick an initiating shock and step through the cascade to see which exposures it reaches and where losses could concentrate. The Map view places the run on an example geography with open data. Every weight is a stated assumption. An exercise, not a forecast, a valuation, a rating or investment advice. To model a place of your own choosing, open the full System Builder.

Hazards

  • Dam failure
  • River flood (set off downstream)
  • Flash flood (set off downstream)
  • Mass displacement (set off downstream)
  • Widespread power outage (set off downstream)
  • Water supply shortfall (set off downstream)

Controls

  • NS-0 Constitution and principles
  • NS-3 Risk record UNIs (grammar, legacy crosswalk, allocation authority)
  • NS-9 Contextual UNIs (deployments, instances, programme instances)
  • NS-10 Policies and clauses (machine-readable obligations: definition, binding, evaluation and enforcement)
  • NS-11 Verification and monitoring (evidence, attestations, zero-trust conformance observation)
  • NS-14 Conformance and crosswalk to external standards
  • NRS-H62 Hazard family: Compound and multi-hazard events (NHS-1 sys.compound)
  • NRS-H113 Hazard family: Financial-system fragility (NHS-1 soc.financial-system)
  • NRS-H118 Hazard family: Organised crime and illicit economies (NHS-1 soc.crime)
  • NRS-H79 Hazard family: Mental health crises (NHS-1 health.mental)
  • NRS-U9 Universe platform profile: Financial Regulation Nexus
  • NRS-C5 Scenarios and stress testing

Observation

  • BIS Data Portal (credit, debt service, property prices, banking statistics) (listed for reference)
  • IMF data services (WEO, IFS, FSI via SDMX) (listed for reference)
  • OECD Data Explorer (SDMX API) (listed for reference)
  • Financial Soundness Indicators
  • Macroeconomic Dashboard

Example geography

  • Western Europe: 152 hexagonal cells
  • Night lights tonight, outages (VIIRS Day/Night Band), NASA GIBS
  • Surface water through cloud, 30 m (OPERA DSWx-S1 radar), NASA GIBS
  • Rain rate, last half hour (IMERG), NASA GIBS
  • Surface soil moisture (SMAP), NASA GIBS
06Overview

What Financial Stability does.

Financial stability is the condition in which the financial system can absorb shocks and keep providing credit, payments and risk transfer. Global Risks Alliance’s platform explains how stress spreads through interconnectedness, nonbank leverage, liquidity spirals and contagion, and how stress tests and resolution respond. It does not forecast markets.

Who it serves

Its community

Macroprudential researchers; systemic-risk analysts; bank and market professionals.

How it works

Its methods

Network analysis; stress scenarios; financial stability research.

What it produces

Its outputs

Systemic vulnerability briefings; cross-sector scenarios.

07Exposure, loss and capital

What Financial Stability means for exposure, loss and capital.

The exposure, loss, scenario and capital views a risk officer, supervisor or ministry of finance would ask for, with the frameworks they report against. Structures follow supervisory and actuarial practice. Values are illustrative: never prices, ratings or advice.

Transmission channels

How a shock in Financial Stability reaches credit, market, underwriting, liquidity and operational risk, and feeds back.

Channel structure after the Basel Committee’s work on climate-related risk drivers and transmission channels; links shown are typical paths, not estimated exposures.

Scenario pathways

How Financial Stability could be stressed under the scenario families central banks and supervisors use.

OrderlyDisorderlyHot house world202520302035204020452050highlow
Scenario familyTransition riskPhysical riskWhat a stress test asks
OrderlyEarly, gradual policyLowerCan the book absorb a steady repricing?
DisorderlyLate, abrupt policyLower to mediumWhat breaks under a sudden repricing and credit migration?
Hot house worldLimited policyHigh and risingWhere do physical losses concentrate in collateral and insurance?
Scenario families as defined by the NGFS; the curves are an illustrative combined pressure index, not NGFS variables or forecasts.
NGFS climate scenarios · Network for Greening the Financial SystemIFRS S2 Climate-related Disclosures · ISSBTCFD recommendations · Financial Stability Board TCFDPrinciples for the effective management of climate-related financial risks · Basel Committee on Banking Supervision
08The problem

Systemic risk is more than the sum of individual risks.

Each bank, insurer, fund or market infrastructure can look sound on its own while the system as a whole is fragile. Systemic risk arises from the connections between institutions and from their shared behaviour. When many firms hold similar assets, depend on the same short-term funding or use similar models, a shock that forces one to sell can lower prices for all, turning individual prudence into collective distress.

Financial history shows recurring patterns. Credit and asset prices rise together in booms, leverage and maturity mismatch accumulate, and risk migrates to parts of the system that are less visible or less regulated. When confidence breaks, funding runs, fire sales and counterparty fears spread stress across markets and borders far faster than fundamentals change. The consequences reach households and governments: lost jobs, lost savings, curtailed credit and public costs that can last for years.

Today the system is more diverse than in past crises. Nonbank intermediaries, such as investment funds, private credit vehicles, insurers and pension funds, play larger roles; markets are faster and more automated; and new sources of shock, from climate to cyber, interact with old vulnerabilities. No single firm can see the whole. That is why shared, system-level understanding matters: it lets each institution see how its own position fits into a pattern of exposures and behaviours that only becomes visible when the system is examined as a whole.

09Spatial finance

Settlement dependencies, and what fails with a node.

How a failure at one financial centre can spread through settlement links. Design links, not real dependencies.

Sixteen financial centres, and how a failure at one spreads through settlement links.Design links, not the real dependencies of any infrastructure.
10What the platform does

System-level research for the profession.

Financial Stability is designed for macroprudential researchers, systemic-risk analysts and bank and market professionals. Its methods are network analysis, stress scenarios and financial stability research.

Briefings

Systemic vulnerability briefings

Analysis of vulnerabilities that build across institutions and markets, with methods and uncertainty.

Scenarios

Cross-sector scenarios

Research scenarios that trace how shocks travel between banks, nonbanks, markets and the real economy.

Methods

Shared methods

Open methods for network and stress analysis that the industry can examine and reuse.

GRA is a nonprofit business league for the financial services industry. It does not lend, underwrite, rate, invest, advise on or arrange transactions, introduce counterparties or take transaction-based pay, and readiness work is not approval. GRA does not conduct macroprudential policy or supervisory stress tests.

11Across the Consortium

Five methods and six counterparts.

The platform rests on five canonical methods: financial economics and macro-finance, network science and contagion, complex systems and agent-based modelling, scenario design and stress testing and econometrics. It is the steward of financial economics for GRA platforms; see the STEM foundation of Financial Stability.

The Global Centre for Risk and Innovation (GCRI) supplies systems science through Systems Modelling and Risk Management. Global Risks Forum (GRF) convenes governance dialogue through Capital Nexus, Policy, Governance and Foresight. Within GRA, the platform works with Banking Nexus, Private Credit and Capital Markets Nexus.

12Coverage

The areas of financial stability this platform takes on.

Financial Stability studies how stress in one part of the financial system reaches the rest: through balance-sheet links between banks, insurers and funds, through leverage and liquidity mismatch outside the banking sector, through fire sales and margin calls, across borders, and back into lending and the real economy. Its pages set out the mechanisms, measures, data, methods and decisions behind systemic risk, stress testing and resolution, with every source labelled. Global Risks Alliance shares industry understanding and does not forecast markets or give investment advice.

Area

Interconnectedness

Exposures between banks, insurers, funds, central counterparties and sovereigns, and how they transmit losses and funding stress.

Area

Nonbank intermediation

Money market funds, investment funds, hedge funds, private credit and other nonbanks that perform credit and liquidity transformation.

Area

Liquidity and market stress

Market liquidity, funding liquidity, margin calls and the conditions under which core markets stop functioning.

Area

Contagion and fire sales

Forced selling, common exposures, runs and confidence effects that spread losses beyond the first institution hit.

Area

Cross-border risk

Capital flows, dollar funding, global banks and spillovers between financial systems.

Area

Crisis management and resolution

Lender of last resort, deposit insurance, resolution regimes and the tools authorities use when firms fail.

Area

Stress testing

Supervisory, system-wide and macroprudential stress tests, their scenarios, models and limits.

Area

Real-economy feedback

How financial stress reaches credit, investment and employment, and how real shocks return to the financial system.

13Grounding

Built on named science, technology, engineering and mathematics.

Every claim on Financial Stability rests on methods with a canonical page in the STEM Commons, so readers can see what a finding depends on and where its limits lie.

Financial economics and macro-financeNetwork science and contagionComplex systems and agent-based modellingScenario design and stress testingEconometrics

See the STEM foundation of Financial Stability

14Cycle

How work moves in this field.

A question becomes evidence, a governed build, an organised community, a controlled test, a reviewed publication and, finally, a decision taken by the competent authority under its own rules.

  1. Question Universe National, regional or institutional priority. Question in Financial Stability
  2. Evidence Foundry STEM foundation of the platform. Evidence in Financial Stability
  3. Build Foundry Foundry. Build in Financial Stability
  4. Organise Universe Nexus ecosystem. Organise in Financial Stability
  5. Test Universe Universe (independent site). Test in Financial Stability
  6. Publish Reports Reports. Publish in Financial Stability
  7. Decide Competent authority Competent authorities and institutions, through NXS-RLS (participants, agreements and handoffs). Decide in Financial Stability
  8. Renew Universe Corrections and the next annual agenda. Renew in Financial Stability

Each step of the cycle in the pillar it runs in; the decision stays with the competent authority, outside the programme.

15Six pillars

How this works across the six pillars.

Financial Stability works through six pillars of one annual programme, led by the Nexus Consortium, with GCRI, GRF and GRA each contributing in its role: explore, experiment and prototype in Labs, build, simulate and prepare in Foundry, convene and test in Universe, codify, correct and apply in Nexus Standards, publish in every format in Reports, teach in the open in Risk Academy.

Select pillars · hover lines18 / 18 handoffs

Route

The whole programme

Every pillar hands its work to another; together they close the year’s feedback loops.

L · F · U · S · R · A

Pillars
6 of 6
Handoffs
18 of 18
Loops
17 closed

Handoffs in play

  • F01Universe → Foundry · Admitted mission becomes a cycle project with a decision caseReadiness preparation
  • F02Foundry → Universe · Core Build Report and go or no-go evidenceControlled build
  • F03Foundry → Reports · Sealed observations and indicator series behind a profileCloseout
  • F04Universe → Reports · After-action and scenario findings for chapters 10 and 13After-action review

and 14 more

F01 to F14 are the recorded handoffs of the programme year, each with the artefact that moves and its phase; R1, R2, R3 and R4 carry work around the ring. A loop counts when every pillar on it is selected. Every pillar is led by the Nexus Consortium.
  1. LabsWhere questions become experiments and prototypes: new methods, data and tools are tried in the open, with their limits on record, before the Foundry builds them, under the Nexus Consortium.Labs
  2. FoundryWhere exposure and scenario evidence is built so supervisors, insurers and investors can read it.Financial Stability in FoundryFoundry
  3. UniverseWhere scenarios are tested in controlled exercises, and finance-readiness dialogues read what they mean for capital and cover.Financial Stability in Universeuniverse.nexus
  4. Nexus StandardsWhere disclosure and data rules are codified so risk evidence is comparable for finance and insurance.Finance, Insurance and the Economy in Standardsnexustandards.com
  5. ReportsWhere sector analysis and the finance and insurance readiness series are published, with exposure and limits stated.Financial Stability in ReportsReports
  6. Risk AcademyWhere finance, insurance and public-finance professionals learn to read risk evidence, on Risk Academy.Faculty of Finance and Economics in Academyrisksacademy.com
19Questions

Questions and answers.

Who publishes Financial Stability?
The Global Risks Alliance (GRA) publishes Financial Stability and is responsible for what it publishes. GRA is a nonprofit business league for the financial services industry. It does not lend, underwrite, rate, invest, advise on or arrange transactions, and readiness work is not approval.
Is Financial Stability active?
Financial Stability is an established platform of The Global Risks Alliance. Information and enquiries are open today. An enquiry receives a reference and names the next step; applications, payments, compute allocations and registrations open only when their team, terms and review capacity exist.
How can I contribute?
Start with the participation paths or write to the contact form. An enquiry receives a reference; it does not create membership, a role or an assignment.
Where are findings published?
Reviewed outputs appear on the publications page, and contributions to the Reports series are listed on Publish in Reports.
Which values on this platform are real?
Indicator names, units, sources, methods and frameworks are real. Levels in figures and canvases are examples in a design. A programme replaces them with labelled evidence it owns.
How do I report an error?
Use corrections and concerns, or write to the integrity concern form. A correction is recorded as a new version, never a silent edit.
Does the platform make macroprudential policy?
No. Macroprudential policy belongs to central banks and designated authorities. GRA publishes shared research that anyone, including authorities, may read.
How does it differ from Banking Nexus?
Banking Nexus focuses on banks. Financial Stability looks at the whole system, including nonbanks, markets and cross-border links, and how they interact.
ReportsContribute

Contribute evidence from this page.

Reports is the Consortium’s quarterly publication. What you know about this subject can become evidence, a case or a correction in the next edition, credited to you and published under CC BY 4.0 where it is your own work.

Global Risks AllianceFinancial StabilityScenario and Stress-TestGlobal Systems Risk and Resilience
How it works

How Financial Stability works.

Choose a view and press Play to follow the platform’s process, its programme year, the standards it applies and how its findings are published. The outline shows how the work is designed to run, not the status of any decision.

Financial Stability

How Financial Stability works

Platforms · Programme year · Standards · Reports

A platform joins a field to named methods, labelled evidence and the outputs it publishes, without becoming the authority it serves.

  1. 01 Scope

    1. 01Field and familiesStart · The platform leadThe home states the field, its families and who it serves.
    2. 02Topic dossiersRecord · Platform authorsTopics explain the subject with labelled evidence.
  2. 02 Evidence

    1. 03Evidence labelsRecord · GCRIEach value is labelled: observed, published statistics, estimated, modelled, scenario or unknown.
    2. 04MethodsStep · Method ownersMethods come from the STEM Commons, each with one canonical page.
  3. 03 Work

    1. 05Scenarios on the systemsModel · Foundry pillarScenarios run on the Nexus systems, labelled as scenario.
    2. 06Standards that applyRecord · Nexus StandardsThe platform names the standards that apply. A validator report is evidence for review.
  4. 04 Publish

    1. 07EditionsRecord · ReportsFindings are published through Reports with their limits.
    2. 08Authority decidesOutcome · The competent authorityDecisions and execution stay with the government, operator or licensed institution.

Financial Stability home · Platforms · Shared methodsAn outline of how the work is designed to run; it does not report the status of any decision or record.

Take part

Take part in Financial Stability.

Start from who you are. Answer an open call. Or form and lead a competence cell on the Financial Stability platform.

Route

National institutions

Ministries, statistics offices and agencies: a national desk and chapter, and a seat in the working groups. National chapters

Route

Sectors and professions

Operators, regulators, banks, insurers and professional bodies whose work touches Financial Stability. Participate

Route

Learning

Courses and practice, with a record of every course completed. Free to study. Open learning

Route

Standards

Draft, review and adopt the methods and data standards with the working groups. Working groups

Route

Communities and research

Universities, civil society and individual experts: projects, data and review. Write to the team

The Global Risks Index

Every figure on this page is indexed: hazards, climate, conflict, the world.

The Index is the Consortium’s indexing system for risk data. Every indicator, hazard, series and country profile carries its Nexus Standards identifier, its source and its licence, so what this page shows can be traced, corrected and reused.

  1. 01 · Sources205 registered sourcesEvery value keeps its source and licence; withheld values are counted.Data and licences
  2. 02 · Nexus StandardsNIS-1 and NHS-1451 indicators, 905 hazards; every record carries a UNI.Nexus Standards
  3. 03 · The Index54 series, 195 country profilesComputed on the standards; no value is published until an edition is released.The Global Risks Index
  4. 04 · This pageFinancial StabilityMaps, figures and feeds read the Index in the context of hazards, climate, conflict.Public API
Sources205registered, each with its licence
Indicators451NIS-1, 106 composites, 20 domain indices
Hazards905NHS-1, crosswalked to UNDRR-ISC HIPs
Series54global, sector, strategic, technology, thematic
Country profiles195one site per country

Series in this context hazards, climate, conflict

  1. GLBGlobal SystemsThe state of interdependent global risk: the twenty domain indices aggregated to the world, the five core systems (water, energy, food, health, biodiversity) and their couplings, the global tail register and the gap…NXS-GRX-AR-000002Hazards · Climate · Conflict
  2. THDisaster Risk Intelligence (DRI)Signals, observations, event streams, geospatial layers and scenario packs turned into structured risk intelligence for preparedness and planning.NXS-GRX-AR-000111Hazards · Climate · Conflict
  3. GSGlobal CitiesUrban exposure, heat, flooding, informal settlement, service dependency and the economic weight of cities at risk.NXS-GRX-AR-000068Hazards · Infrastructure · Climate
  4. GSGlobal ClimateChronic and acute physical climate hazard, transition exposure, adaptation gaps and scenario pathways to 2030, 2050 and 2100.NXS-GRX-AR-000065Climate · Hazards · Finance

All 54 series · The 20 domain indices

Country profiles the world

Every country profile carries the source and licence of each value. Correct a value or reply

Hazard domains NHS-1

Geodata and API open

Open layers on an equal-area hexagon grid, shown as densities per km² or as symbols: People · GHSL 2025People · WorldPop 2025Built-up areaPortsAirportsRoadsRailwaysRivers and lake centrelines

/api/v1/public/grix · https://nexustandards.com/uni/{uni}
Developers · Data · Made with Natural Earth, Public domain; GHSL and WorldPop, CC BY 4.0

Snapshot of the Index registries pinned 2026-10-23 · 22c6eed. Research and risk-analytics information: not a rating, an official classification, a warning, a benchmark or advice.

Financial Stability

Bring an exposure or capital question to the Alliance.

Information and enquiries are open today. An enquiry receives a reference and names the next step; applications, payments, compute allocations and registrations open only when their team, terms and review capacity exist.

The Global Risks Alliance

Finance · trust · precision

Not for profit

Our articles, maps and twins are free to read and free to republish. Readers and partners keep it that way.

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Who funds us

GRA is a not-for-profit institution. To ask who funds a piece of work, use the funding questions form.

Independence

Editors and the expert reviewers named on each article decide what we publish. Funders and partners do not review or approve articles before publication.

Licence

Articles: CC BY 4.0. Figures, maps, twins and data: CC BY 4.0. Other uses: ask through the permissions form.