The financial stability index – An insight into the financial and economic conditions of Romania

The goal of this paper is to quantify the index of financial stability linking it with macroeconomic indicators for Romanian economy. The index is intended to analyze the relationships between the main indicators of the banking sector and the most relevant macroeconomic indicators. The Financial Stability Index synthetizes the balance state and evolution of a complex of financial variables as well as the impact of the banking system stability upon the real economy. In this paper we intend to construe the Financial Stability Index (FSI) by using the VAR auto regressive method