2025, Vol. 8, Issue 2

author(s)
Robert Adeniyi Aderinmola

abstract
This study investigates consumer sentiment as an early-warning signal for systemic risk in financial markets. It underscores the role of behavioural intelligence, where shifts in sentiment often precede financial instability. Sentiment indices, consumer confidence surveys, and social media analytics were applied to assess the value of real-time behavioural data in monitoring systemic vulnerabilities. The results reveal that changes in market psychology provide early indicators of liquidity shortages, asset bubbles, and contagion effects. By integrating sentiment-based indicators with established risk measures, the analysis demonstrates improved predictive capacity and greater resilience in stability frameworks. The study concludes that consumer sentiment is not only a reflection of market dynamics but also a practical input for early-warning mechanisms. It is recommended that regulators and institutions embed sentiment-driven models into financial stability systems to enhance anticipatory responses and safeguard against systemic disruptions.