Signs of instability or vulnerability could thus manifest in different variables or indicators. There are thus challenges in first identifying a set of indicators which need to be monitored for financial stability and then identifying the level at which each indicator reflects stress conditions.
The task becomes challenging given the interdependence and the complex interactions of different elements of the financial system among themselves  BIS central bankers’ speeches  7  and with the real economy. Further complications arise from the time and cross-sectional dimensions of interactions.