Construction and analysis of regional financial stability index in China: Regional system status, difference measure and spatio‐temporal variation

In the course of its steady development, China's financial landscape confronts an array of risks and challenges. Against the backdrop of China's sustained commitment to regional coordinated development strategies, the imperative of achieving coordinated financial stability across regions becomes paramount for fostering macro‐financial stability. This study addresses this imperative by formulating a regional financial stability index grounded in the provincial financial stability index. The ensuing analyses encompass the delineation of regional financial stability status, the quantification of disparities, and the scrutiny of temporal and spatial dynamics. Our findings reveal a relatively high level of regional financial stability in China, with a modest overall variance between national and regional financial stability. Notably, the financial stability of the eastern region assumes a pivotal role in influencing the nationwide financial stability landscape. The regional financial stability index demonstrates dynamic evolutionary features characterised by temporal fluctuations and discernible spatial differentiation patterns. Drawing upon these insights, the article proffers a set of targeted policy recommendations, with practical implications for fortifying macro‐financial stability not only in China but also in other nations.