Overall, the finances of Danish households are therefore still sound, not only because of the capital gains reaped during the upswing, but also because net savings have been positive for a long time – in the range of 5-10 per cent of annual disposable incomes. This prudence pays off now that the economy is moving in the opposite direction.
I will start by briefly describing the notion of systemic risk and various approaches used to identify and measure it. I will then discuss two state-of-the-art quantitative models that we have developed to improve our assessment of risks to the Canadian financial system. The multiple dimensions of systemic risk Systemic, or system-wide, risk goes beyond individual institutions and markets.