Financial Fragility Clock

MSc FinTech · Group 5 · University of Birmingham

A Minsky-framework fragility monitor for the Istanbul Stock Exchange (ISE/BIST), scoring market stress 0–100 across a 2003–2026 window using regularised regression and tree-based models.

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What it does

Maps monthly ISE returns onto three Minsky financing regimes:

Score	Regime	Interpretation
< 40	Hedge	Debt serviced from income
40–70	Speculative	Debt serviced from rollovers, not income
≥ 70	Ponzi	New borrowing required just to pay interest

A Doomsday Clock metaphor maps score 70 → midnight. Hands reaching 12 signals a Ponzi threshold crossing.

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Models

	Model A	Model B
Training window	2009–2011 (GFC recovery)	2003–2026 (full history)
Features	7 global indices	33 features incl. USDTRY vol, VIX lags, DXY lags

Algorithms compared: OLS · Elastic Net (primary) · Lasso · Random Forest
Validation: Walk-forward splits at 2018 TRY crisis, COVID-19 2020, 2021–24 Turkey stress

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Pages

• dashboard.html — interactive fragility clock with timeline scrubber, SHAP charts, correlation heatmap, walk-forward R² heatmap
• presentation.html — 8-slide deck (light/dark toggle)
• reports.html — full research report with SVG + PNG export and 24-reference Harvard bibliography

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Structure

├── data/fragility_output.json     # model scores, SHAP, walk-forward, correlations
├── plots/                         # 18 static PNG figures (§2 and §3)
├── section1_eda.ipynb
├── section2_model_build.ipynb
├── section3_model_b.ipynb
├── dashboard.html
├── presentation.html
└── reports.html

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Running locally

python3 -m http.server 8000
# open http://localhost:8000

Data is fetched from data/fragility_output.json at runtime — no build step, no mock data on a proper server.

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Key findings

• COVID-19 (Mar–Apr 2020): Model B crosses Ponzi threshold (71.1 → 74.3); Model A reaches only 55.6
• November 2021: Largest divergence — B reads 53.0, A reads 33.5 (+19.4 gap) during Turkey-specific stress with calm global markets
• Current (April 2026): Model B = 38.2 · Model A = 34.2 · Hedge regime

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References

Theoretical foundation: Minsky (1992). Full 24-reference Harvard list in reports.html §11.