Glossary · SIGMA Intelligence

Regime Analysis

The classification of a financial system's current state into one of five discrete risk regimes (ROBUST → STABLE → WARNING → STRESS → CRISIS) based on SIGMA Score thresholds and behavioral signal clustering.

Definition

Financial systems do not transition linearly between risk levels — they exhibit regime-switching behavior, where the system remains in a relatively stable state until a threshold is crossed, after which rapid non-linear transition occurs. Regime analysis identifies which of five states a monitored entity currently occupies: ROBUST (SIGMA 0–34), STABLE (35–49), WARNING (50–64), STRESS (65–79), and CRISIS (80–100). Regime boundaries are not arbitrary — they correspond to historically validated inflection points in crisis dynamics. The transition from WARNING to STRESS historically coincides with the beginning of media-visible financial stress. The transition from STRESS to CRISIS correlates with the activation of emergency policy responses.

In the SIGMA Engine

Every SIGMA Score display on Noosphere Prime includes the current regime. Color coding: ROBUST (blue), STABLE (green), WARNING (gold), STRESS (orange), CRISIS (red). Regime changes trigger notifications for subscribed users. The Prediction Ledger tracks SIGMA's regime-change predictions against actual outcomes.

Frequently Asked

How long do regimes typically last?

Based on historical analysis of 15 major economies 2000–2026: ROBUST regimes last avg 14 months, STABLE 8 months, WARNING 3.2 months, STRESS 2.1 months (before either resolution or escalation to CRISIS), CRISIS 1.4 months (acute phase). Prolonged STRESS without resolution (>6 months) is historically rare and typically resolves via policy intervention or escalation.

Related Concepts

SIGMA Score Early Warning System (EWS)Fragility Index