Identifying systemic risks is complex. Future crises will probably be different from past crises, but no doubt certain characteristics will be the same, such as excessive credit growth. For example, it may be particularly relevant to look at the building up of risks in areas which have only recently been regulated as a result of the financial crisis, e.g. capital and hedge funds, as well as areas which have not yet been closely regulated, such as the shadow banking system, which resembles investment or banking activities, but which is not carried out by regulated credit institutions. In its monitoring of systemic financial risks, the Systemic Risk Council may look at how risks build up over time and across sectors.
The Systemic Risk Council monitors the build-up of systemic risks from different angles in six monitoring blocks. Within each block, is the Council asesses whether underlying forces may be contributing to systemic risks building up.
The Council has specific methods for monitoring risks relevant to applying the countercyclical capital buffer and those related to mortgages. On these two topics, the Council regularly publishes a subset of the information basis, on which the discussion of the Council relies.