and bond markets, which is considered the beginning of the bursting of the asset - price bubble ; and ( b ) november 1997 : the bankruptcy of sanyo securities, which is considered the start of a series of financial institution bankruptcies data is called a leading indicator if the juglar cycle extracted turns down before the above two crises, or a lagging indicator if the extracted juglar cycle turns down after the two crises. fcixs comprise leading and lagging indexes. kamada and nasu propose three different types of index : type d, c, and b. here, we explain the type - d leading fcix, which is a diffusion index and constructed as follows :, where denotes the juglar cycle extracted from a leading indicator ; the number of leading indicators ; and positive and – 1 if its first difference ; the index function, which takes on + 1 if is is negative. the type - d lagging fcix is obtained in a similar fashion. the oecd ( 2008 ) has recently adopted the hp - based band pass filter in place of the phase average trend ( pat ) method to construct its composite leading indicators. the pat is a traditional method of trend detection originally developed by the nber and is calculated as follows : deviations from a 75 - month centered moving average are first calculated ; then, the obtained series is divided into expansion and contraction phases and the average is calculated for each phase ; a three - phase centered moving average is calculated and these averages are interpolated. bis central bankers ’ speeches fcixs may not be very sensitive to a revival of financial activity, because they are designed to detect signs of financial crisis. as the father of business cycle analysis, arthur spiethoff, pointed out, the timing of recoveries is often ambiguous, compared with that of crises. the japanese fcixs are constructed only from monthly, quarterly, and semi - annual financial data that can be traced back at least to the mid - 1980s. kamada and nasu have found 8 leading indicators : stock prices of the banking, real estate, and construction sectors ; the lending attitude of financial institutions ; the financial positions of firms ; current profit levels of firms ; housing loans ; and commodity prices. some of the leading indicators are affected by global shocks and enable the leading fcix to detect financial crises prevailing in overseas economies. in contrast, kamada and nasu have found 11 lagging indicators : corporate debt ; household debt ; lending interest rates ; changes in

it first hit and, little by little, it transformed from a mortgage crisis into the deepest global crisis since the great depression. the response to the crisis and the lessons drawn from it followed in a similar fashion. the approach and extent of response to the crisis was not uniform across the countries. the economies having fresh memories of the financial crises responded swiftly and more strongly. the same can be said for the public and business community in these economies. the economies enjoying a favourable fiscal position also faced the crisis without impairing their long - term fiscal sustainability. the situation seemed slightly more complex in some developed european economies. seeking to find a balance between deleveraging and fiscal consolidation, euro area authorities demanded setting up a protective wall against the possible fire bursting into from the outside. but, as noted, this fire had already burst out and was spreading inside the euro area walls ; therefore, setting up this “ protective wall against fire ” was pointless at this point. the european union and its institutional structures, along bis central bankers ’ speeches with the international financial institutions and partners, are undertaking a number of reforms to put this “ fire ” out. however, it is still unclear how long this “ agony ” will last and likewise is its impact on the euro area and its trading partners. the exhaustion of fiscal and monetary policy incentives failed to increase economic activity and, moreover, it further aggravated the sovereign debt situation and financial stability. consequently, the sovereign debt sustainability and banking system credibility - related issues were added to the concerns about economic growth. the question facing many countries today has the form of a trade - off between stability and sovereignty. currently, the latter two are intertwined in an endogenous relationship ( of mutual impact on one another ), in which the multi - dimensional need for stability ( implying the maintenance of price stability, macroeconomic stability, financial and fiscal stability ) requires taking balancing measures. the latter have considerable social costs in the short run. social discontent against them and the governments proposing them erodes the credibility of reforms and the authorities, increasing, in turn, the sovereign debt risk. euro area, and particularly its southern members, are facing a concern, whose solution bears consequences with economic and political implications for the future of all member states and the common currency. the reforms and policies undertaken by euro area authorities, individually or in a concerted manner, have important and direct implications for our economies. experience to date has shown that our partners and their large banks have adopted an approach that maximizes their