An improved composite indicator of systemic stress (CISS) for Norway

Norges Bank's advice on the countercyclical capital buffer is based on a broad set of qualitative and quantitative information. The European Systemic Risk Board (ESRB) recommends including a general indicator of systemic stress in the financial system in this decision basis. The composite indicator of systemic stress (CISS) measures the overall stress level in the financial system and has proved to be a good early warning indicator of a systemic banking crisis in real time or in the near future. It may therefore be a useful indicator to include in the decision basis for the countercyclical capital buffer. The levels of the CISS for Norway have been particularly high during international crises.