At the Public Sector Economics virtual presentation on 27 June 2023 Tihana Škrinjarić, a research economist at the Bank of England, Stress Test Strategy Division, presented her article, dealing with approaches to constructing a composite indicator of cyclical systemic risk accumulation with a specific focus on Croatia.

The article offers a critical overview of the methodological approaches, with suggestions for their improvement, focusing particularly on the specifics of Croatian data.

Škrinjarić analyses the advantages and disadvantages of approaches to creating composite indicators for monitoring cyclical systemic risks, concluding that this is a demanding task. To make better macroprudential decisions based on financial cycle monitoring, it is necessary to consider the specifics of the economy's financial system, other countries experiences, and various methodological aspects and details to obtain more reliable final indicators. In the case of Croatian data, it is necessary to monitor several indicators simultaneously and revise the methodological approach when the availability of data increases.

The article was awarded the first prize in the regular category of the annual 2022 Prof. Dr. Marijan Hanžeković Trust Competition.

The presentation was moderated by Martina Pezer, a researcher at the Institute of Public Finance.

A recording and a presentation of this interesting lecture are also available.