<p><br/></p><p><font size="4">This paper presents background work that has been the basis for the development of the<br/>market and credit risk indicators (MRI and CRI, respectively) as published in the IMF’s<br/>Global Financial Stability Report (GFSR) since September 2004. The fundamental idea was<br/>to build a set of Financial Indicators on Risk and Stability (FIRST) that could reflect the<br/>market perceptions for current and future stress on financial institutions. The focus of the<br/>analysis is mainly on large, complex financial institutions (LCFIs) operating in the most<br/>advanced financial markets, MRI and CRI have also been applied to internationally active<br/>commercial banks and insurance companies.</font></p>