building the aggregate index for measuring financial stability in Algeria during the period 2003-2017

Abstract

The aim of this study seeks to build an aggregate index for measuring financial stability in Algeria, by utilizing a variety of macroeconomic and financial data to compute the index over the period 2003-2017 by compiling 17 indicators that fall into four partial indicators : so we used 4 variables to construct financial development index, 4 variables build Financial soundness index, 7 variables develop economic stability index, 2 variables estimate global economic index. The results of study refer to a deterioration of financial stability in the Algeria over the period 2003- 2015 because of the fluctuation of the partial indicators, and its improvement since 2016, 2017 firstly because of the increase in the net claims of the bank of Algeria is the result of direct purchases of treasury bond in the framework of non-conventional financing, secondly low nonperforming loans, and finally increased lending to the private sector.