Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/298455 
Year of Publication: 
2023
Series/Report no.: 
Staff Memo No. 1/2023
Publisher: 
Norges Bank, Oslo
Abstract: 
We have constructed a financial conditions index for Norway (FCIN). The FCIN offers a daily update on Norwegian financial conditions based on data from January 2003 on bank lending rates, bond spreads, the foreign exchange market, the stock market and the housing market. The index is constructed by the use of principal component analysis and has an average value of zero and a standard deviation of one. A positive value indicates that financial conditions are tighter than the historical average, while a negative value suggests that financial conditions are looser than the historical average. The FCIN is constructed to provide real time insight into financial conditions for the Norwegian economy beyond what is already included in the policy rate and market policy rate expectations. Here we depart from other studies which typically aim at assessing financial conditions more broadly. The index is meant to complement monetary policy analyses and improve our assessments of economic activity.
Subjects: 
Financial conditions index
forecasting
principal component analysis
financial shocks
JEL: 
C32
C53
E32
E44
Persistent Identifier of the first edition: 
ISBN: 
978-82-8379-258-4
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Research Report
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