## _wp04187 — References

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### I. INTRODUCTION
- Central questions:
  - Does financial stability require the soundness of institutions, the stability of markets, the absence of turbulence, low volatility, or something more fundamental?
  - Can it be achieved and maintained through individual private actions and unfettered market forces alone?
  - What is the role of the public sector in fostering financial stability versus private-collective action?
- Observations:
  - There is no single, widely accepted and used definition of financial stability; many recent attempts "fit into a particular theme of a paper or speech."
  - Most authors prefer to define financial instability or systemic risk (see Annex starting on page 13).
  - The paper adopts an approach to define financial stability (rather than its absence) to serve as a useful "policy" objective and to leave open possibilities of increasing private and social benefits of finance.
- Methodological note:
  - The analysis of financial stability is "still in its infant stage of development and practice" compared with monetary and/or macroeconomic stability.
  - In rare rigorous expressions, financial systems often constitute "one or two equations in a much larger macroeconomic model."
  - Organization: prior concepts (Section II), five principles (Section III), a proposed broad definition (Section IV), and practical implications (final section).

### II. PRIOR CONCEPTS OF FINANCE AND FINANCE’S STRENGTHS AND WEAKNESSES
- Foundational understandings:
  - Finance operates within a monetary economy where fiat money is the unit of account and means of payment.
  - Modern finance provides substitutes for money—promises to pay money in the future—that facilitate intertemporal resource allocations.
  - Many services provided by money and finance are both private and public goods; finance enhances and distributes public-good characteristics of fiat money.
  - Finance "existentially embodies uncertainty (about human trust)" and transforms uncertainty into quantifiable and "priceable" risks (default, market, liquidity risk).
- Benefits:
  - Enlarges pool of liquidity for production, consumption, and exchange.
  - Facilitates savings, investment, and wealth accumulation.
- Costs:
  - Trust is fragile and can be a source of potential financial instability; doubts about trust can propagate as market and other financial risks and may extend to the real economy.
- Literature references noted:
  - Diamond and Dybvig (1983) and Diamond and Rajan (2000) on bank intermediation and fragility.
  - See Schinasi (2004) for more detailed discussion.

### III. KEY PRINCIPLES FOR DEFINING FINANCIAL STABILITY
- Principle 1:
  - Financial stability is broad, encompassing infrastructure, institutions, and markets; a systemic perspective is required because disturbances in any component can undermine overall stability.
- Principle 2:
  - Financial stability implies finance fulfills its role in allocating resources and risks, mobilizing savings, facilitating wealth accumulation and growth, and ensuring payments systems function smoothly; overlap with monetary stability.
- Principle 3:
  - Concept relates to both absence of actual crises and the system’s ability to limit, contain, and deal with imbalances before they threaten the system—entails preventive and remedial dimensions and potential trade-offs between market mechanisms and intervention (e.g., liquidity injections).
- Principle 4:
  - Financial stability should be couched in terms of potential consequences for the real economy; disturbances that do not damage economic activity at large need not be considered threats.
- Principle 5:
  - Financial stability occurs along a continuum (range of conditions) rather than as a single static state; the continuum is multidimensional and consistent with parts of the system operating below peak performance ("spare tire" concept).
- Implications of the continuum view:
  - Stability is expectations-based, dynamic, and dependent on many interlinked parts.
  - What represents stability at one time may be more or less stable at another time due to technological, political, and social developments.

### IV. DEFINITION OF FINANCIAL SYSTEM STABILITY
- Three core abilities in the broad conceptualization:
  - (a) facilitate efficient allocation of economic resources and effectiveness of economic processes (wealth accumulation, growth, social prosperity);
  - (b) assess, price, allocate, and manage financial risks; and
  - (c) maintain ability to perform these functions even when affected by external shocks or imbalances, primarily through self-corrective mechanisms.
- Proposed definition:
  - "A financial system is in a range of stability whenever it is capable of facilitating (rather than impeding) the performance of an economy, and of dissipating financial imbalances that arise endogenously or as a result of significant adverse and unanticipated events."
- Clarifications:
  - "Range of stability" = continuum; multidimensional across observable and measurable variables capturing how finance facilitates savings/investment, lending/borrowing, liquidity creation/distribution, asset pricing, and wealth accumulation/growth.
  - "Facilitating (rather than impeding) the performance of an economy" = contributing to efficient allocation of real resources, growth of output, saving, investment, and wealth creation.
  - "Dissipate financial imbalances" = movement along the continuum toward stability, often via self-corrective mechanisms including entry/exit of market participants.
- Additional notes:
  - Financial systems can impend the economy endogenously via accumulation of imbalances (e.g., asset mispricing, credit-risk concentrations, illiquidity).
  - Financial institutions and markets internalize risks and embody potential fragility rooted in failures of trust.
  - Definition presupposes positive and negative externalities of finance; movements along the stability continuum affect aggregate economic welfare.
- Corollaries:
  - (i) "A financial system is entering a range of instability whenever it is threatening to impede the performance of an economy."
  - (ii) "A financial system is in a range of instability when it is impeding performance and threatening to continue to do so."
- Alternative general definition:
  - "Financial stability is a condition in which an economy’s mechanisms for pricing, allocating, and managing financial risks (credit, liquidity, counterparty, market, etc.) are functioning well enough to contribute to the performance of the economy (as defined above)."
- Methodological suggestions:
  - Use multidimensional grids (e.g., combinations of interest rate spread volatility and banking system capital) to identify ranges of stability versus instability.
  - Statistical tools and historical episodes could help estimate boundaries separating stability from potential instability; in principle, define n variables and boundaries as n functions (nonlinear).

### V. SOME PRACTICAL IMPLICATIONS OF THE DEFINITION
- Classification of potential difficulties (three broad categories):
  - Difficulties in a single institution or market not likely to have system-wide consequences.
  - Difficulties involving several relatively important institutions with some nontrivial probability of spillovers and contagion.
  - Problems likely to spread to a significant number and types of financial institutions and across usually unrelated markets for managing liquidity needs (e.g., forward, interbank, equity markets).
- Policy implications:
  - Different categories require different diagnostic tools and responses: from doing nothing to intensified supervision to liquidity injections to interventions into particular institutions.
- Complexities with practical significance:
  - Developments in financial stability cannot be summarized in a single quantitative indicator; no unequivocal unit of measurement exists (contrast with price stability).
  - Developments are inherently difficult to forecast; forward-looking approaches are needed to identify build-up of risks and imbalances; attention should focus on the entire distribution of outcomes, particularly the left "tail."
  - Forecasts of financial stability may be inherently less reliable than monetary/macroeconomic forecasts due to contagion, nonlinearities, and greater fundamental uncertainty (Knight, 1921).
  - Developments in financial stability are only partly controllable; policy instruments often have other primary objectives and impacts on stability can be indirect or frictional; exogenous shocks further limit controllability.
  - Policies aimed at financial stability often involve a trade-off between resilience and efficiency (e.g., higher solvency requirements vs. capital costs; exchange restrictions vs. market efficiency).
  - Policy requirements may be time inconsistent: short-term stability measures (lender-of-last-resort finance, deposit guarantees) can create moral hazard and undermine market discipline over time.

### ANNEX — ALTERNATIVE DEFINITIONS OF FINANCIAL STABILITY (selected quotations)
- John Chant and others (Bank of Canada):
  - Financial instability "refers to conditions in financial markets that harm, or threaten to harm, an economy’s performance through their impact on the working of the financial system...." (pp. 3–4).
- Andrew Crockett (BIS and FSF):
  - Defines financial stability as "an absence of instability" and emphasizes potential for damage, including institutions large or highly interconnected.
- Deutsche Bundesbank:
  - Financial stability "broadly describes a steady state in which the financial system efficiently performs its key economic functions...and is able to do so even in the event of shocks, stress situations, and periods of profound structural change."
- Wim Duisenberg (ECB):
  - Financial stability refers to "the smooth functioning of the key elements that make up the financial system."
- Roger Ferguson (Board of Governors, U.S. Federal Reserve System):
  - Defines financial instability by three criteria: (i) asset prices diverge sharply from fundamentals; and/or (ii) market functioning and credit availability are significantly distorted; with the result that (iii) aggregate spending deviates (or is likely to deviate) significantly from the economy’s ability to produce.
- Michael Foot (U.K. Financial Services Authority):
  - Financial stability where: (a) monetary stability; (b) employment near natural rate; (c) confidence in operation of key financial institutions and markets; (d) no relative price movements undermining (a) or (b).
- Sir Andrew Large:
  - Thinks of financial stability in terms of "maintaining confidence in the financial system"; threats spread via contagion and can cause volatile and unpredictable price changes.
- Frederick Mishkin (Columbia University):
  - Financial instability "occurs when shocks to the financial system interfere with information flow so that the financial system can no longer do its job of channeling funds to those with productive investment opportunities."
- Norges Bank:
  - Financial stability means the financial system "is robust to disturbances in the economy, so that it is able to mediate financing, carry out payments, and redistribute risk in a satisfactory manner."
- Tommaso Padoa-Schioppa (ECB):
  - Financial stability is a condition where the financial system "is able to withstand shocks without giving way to cumulative processes, which impair the allocation of savings to investment opportunities and the processing of payments in the economy."
- Anna Schwartz (NBER):
  - A financial crisis is "fueled by fears that the means of payment will be unobtainable at any price...The essence of a financial crisis is that it is short-lived, ending with a slackening of the public’s demand for additional currency."
- Nout Wellink (De Nederlandsche Bank):
  - A stable financial system "is capable of efficiently allocating resources and absorbing shocks, preventing these from having a disruptive effect on the real economy or on other financial systems...The system itself should not be a source of shocks."

### Cited works (selected references listed in the document)
- Chant, John, 2003, “Financial Stability As a Policy Goal,” in Essays on Financial Stability, by John Chant, Alexandra Lai, Mark Illing, and Fred Daniel, Bank of Canada Technical Report No. 95 (Ottawa: Bank of Canada), September, pp. 3–4.
- Crockett, Andrew, 1997, “The Theory and Practice of Financial Stability,” GEI Newsletter Issue No. 6 (United Kingdom: Gonville and Caius College Cambridge), 11–12 July.
- Davis, Philip, 2002, “A Typology of Financial Instability,” Financial Stability Report 2 (Vienna: Österreichische Nationalbibliothek).
- Deutsche Bundesbank (2003), “Report on the Stability of the German Financial System,” Monthly Report, Frankfurt, December.
- Diamond, Douglas W., and Raghuram G. Rajan, 2001, “Liquidity Risk, Liquidity Creation, and Financial Fragility: A Theory of Banking,” Journal of Political Economy, Vol. 109, 2, pp. 287–327.
- ——— , 2001, “Banks, Short Term Debt, and Financial Crises: Theory, Policy Implications, and Applications,” Proceedings of Carnegie Rochester Series on Public Policy (Amsterdam: Elsevier Science),Vol. 54, No. 1, pp. 37–71.
- Duisenberg, Wim F., 2001, “The Contribution of the Euro to Financial Stability,” in Globalization of Financial Markets and Financial Stability—Challenges for Europe (Baden-Baden: Nomos Verlagsgesellschaft), pp. 37–51.
- Ferguson, Roger, 2002, “Should Financial Stability Be An Explicit Central Bank Objective?” (Washington: Federal Reserve Board).
- Foot, Michael, 2003, “What Is ‘Financial Stability’ and How Do We Get It?” The Roy Bridge Memorial Lecture (United Kingdom: Financial Services Authority), April 3.
- Greenspan, Alan, 1999, “Do Efficient Markets Mitigate Financial Crises?” speech delivered before the 1999 Financial Markets Conference of the Federal Reserve Bank of Atlanta.
- Haldane, Andrew, 2004, “Defining Monetary and Financial Stability” (unpublished; London: Bank of England), February.
- Houben, Aerdt C.F.J., Jan Kakes, and Garry Schinasi, 2004, “Toward a Framework for Safeguarding Financial Stability,” IMF Working Paper 04/101 (Washington: International Monetary Fund) and DNB Occasional Paper (Amsterdam, Forthcoming).
- Large, Sir Andrew, 2003, “Financial Stability: Maintaining Confidence in a Complex World,” in Financial Stability Review (London: Bank of England), December, pp. 170–74.
- Mishkin, Frederick, 1999, “Global Financial Instability: Framework, Events, Issues,” Journal of Economic Perspectives, Vol. 13 (Fall), pp. 3–20.
- Norwegian Central Bank, 2003, Financial Stability Review, February.
- Padoa-Schioppa, Tomasso, 2003, “Central Banks and Financial Stability: Exploring the Land In Between,” in The Transformation of the European Financial System, ed. by Vitor Gaspar and others (Frankfurt: European Central Bank), pp. 269–310.
- Schinasi, Garry J., 2003, “Responsibility of Central Banks for Stability in Financial Markets,” in Current Developments in Monetary and Financial Law—Volume 2 (Washington: International Monetary Fund), Chapter 17.
- ——— , 2004, “Private Finance and Public Policy,” IMF Working Paper 04/120 (Washington: International Monetary Fund).
- Schwartz, Anna J., 1986, “Real and Pseudo-Financial Crises” in Financial Crises and the World Banking System, ed. by Forrest Capie and Geoffrey E. Woods (New York: St. Martin’s Press).
- Truman, Edwin, 2003, Inflation Targeting in the World Economy (Washington: Institute for International Economics).
- Wellink, Nout, 2002, “Current Issues in Central Banking”, (Oranjestad: Central Bank of Aruba), November 14.

*Source: _wp04187 - References*

### References..............................................................................................................

### _wp04187 - References

### I. INTRODUCTION
- Central questions posed:
  - Does financial stability require the soundness of institutions, the stability of markets, the absence of turbulence, low volatility, or something more fundamental?
  - Can it be achieved and maintained through individual private actions and unfettered market forces alone?
  - What is the role of the public sector in fostering financial stability versus private-collective action?
- Observations:
  - There is no single, widely accepted and used definition of financial stability; many recent attempts "fit into a particular theme of a paper or speech."
  - Most authors prefer to define financial instability or systemic risk (see Annex starting on page 13).
  - The paper adopts an approach to define financial stability (rather than its absence) to serve as a useful "policy" objective and to leave open possibilities of increasing private and social benefits of finance.
- Methodological note:
  - The analysis of financial stability is "still in its infant stage of development and practice" compared with monetary and/or macroeconomic stability.
  - In rare rigorous expressions, financial systems often constitute "one or two equations in a much larger macroeconomic model."
  - The paper is organized into sections: prior concepts (Section II), five principles (Section III), a proposed broad definition (Section IV), and practical implications (final section).

### II. PRIOR CONCEPTS OF FINANCE AND FINANCE’S STRENGTHS AND WEAKNESSES
- Foundational understandings emphasized:
  - Finance operates within a monetary economy where fiat money is the unit of account and means of payment.
  - Modern finance provides substitutes for money—promises to pay money in the future—that facilitate intertemporal resource allocations.
  - Many services provided by money and finance are both private and public goods; finance enhances and distributes public-good characteristics of fiat money.
  - Finance "existentially embodies uncertainty (about human trust)" and transforms uncertainty into quantifiable and "priceable" risks (default, market, liquidity risk).
- Benefits and costs:
  - Benefits: enlarges pool of liquidity for production, consumption, and exchange; facilitates savings, investment, and wealth accumulation.
  - Costs: trust is fragile and can be a source of potential financial instability; doubts about trust can propagate as market and other financial risks and may extend to the real economy.
- References to literature:
  - Diamond and Dybvig (1983) and Diamond and Rajan (2000) on bank intermediation and fragility.
  - See Schinasi (2004) for more detailed discussion.

### III. KEY PRINCIPLES FOR DEFINING FINANCIAL STABILITY
- Identified core principles:
  - Principle 1: Financial stability is broad, encompassing infrastructure, institutions, and markets; systemic perspective required because disturbances in any component can undermine overall stability.
  - Principle 2: Financial stability implies finance fulfills its role in allocating resources and risks, mobilizing savings, facilitating wealth accumulation and growth, and ensuring payments systems function smoothly; overlap with monetary stability.
  - Principle 3: Concept relates to both absence of actual crises and the system’s ability to limit, contain, and deal with imbalances before they threaten the system—entails preventive and remedial dimensions and potential trade-offs between market mechanisms and intervention (e.g., liquidity injections).
  - Principle 4: Financial stability should be couched in terms of potential consequences for the real economy; disturbances that do not damage economic activity at large need not be considered threats.
  - Principle 5: Financial stability occurs along a continuum (range of conditions) rather than as a single static state; the continuum is multidimensional and consistent with parts of the system operating below peak performance ("spare tire" concept).
- Implications of continuum view:
  - Stability is expectations-based, dynamic, and dependent on many interlinked parts.
  - What represents stability at one time may be more or less stable at another time due to technological, political, and social developments.

### IV. DEFINITION OF FINANCIAL SYSTEM STABILITY
- Broad conceptualization (three core abilities):
  - (a) facilitate efficient allocation of economic resources and effectiveness of economic processes (wealth accumulation, growth, social prosperity);
  - (b) assess, price, allocate, and manage financial risks; and
  - (c) maintain ability to perform these functions even when affected by external shocks or imbalances, primarily through self-corrective mechanisms.
- Proposed definition:
  - "A financial system is in a range of stability whenever it is capable of facilitating (rather than impeding) the performance of an economy, and of dissipating financial imbalances that arise endogenously or as a result of significant adverse and unanticipated events."
- Clarifications of key phrases:
  - "Range of stability" = continuum; multidimensional across observable and measurable variables capturing how finance facilitates savings/investment, lending/borrowing, liquidity creation/distribution, asset pricing, and wealth accumulation/growth.
  - "Facilitating (rather than impeding) the performance of an economy" = contributing to efficient allocation of real resources, growth of output, saving, investment, and wealth creation.
  - "Dissipate financial imbalances" = movement along the continuum toward stability, often via self-corrective mechanisms including entry/exit of market participants.
- Additional notes:
  - Financial systems can impend economy endogenously via accumulation of imbalances (e.g., asset mispricing, credit-risk concentrations, illiquidity).
  - Financial institutions and markets internalize risks and embody potential fragility rooted in failures of trust.
  - Definition presupposes positive and negative externalities of finance; movements along the stability continuum affect aggregate economic welfare.
- Corollary definitions:
  - (i) "A financial system is entering a range of instability whenever it is threatening to impede the performance of an economy."
  - (ii) "A financial system is in a range of instability when it is impeding performance and threatening to continue to do so."
- Alternative general definition:
  - "Financial stability is a condition in which an economy’s mechanisms for pricing, allocating, and managing financial risks (credit, liquidity, counterparty, market, etc.) are functioning well enough to contribute to the performance of the economy (as defined above)."
- Methodological suggestions:
  - Use multidimensional grids (e.g., combinations of interest rate spread volatility and banking system capital) to identify ranges of stability versus instability.
  - Statistical tools and historical episodes could help estimate boundaries separating stability from potential instability; in principle, define n variables and boundaries as n functions (nonlinear).

### V. SOME PRACTICAL IMPLICATIONS OF THE DEFINITION
- Classification of potential difficulties (three broad categories):
  - Difficulties in a single institution or market not likely to have system-wide consequences.
  - Difficulties involving several relatively important institutions with some nontrivial probability of spillovers and contagion.
  - Problems likely to spread to a significant number and types of financial institutions and across usually unrelated markets for managing liquidity needs (e.g., forward, interbank, equity markets).
- Policy implications:
  - Different categories require different diagnostic tools and responses: from doing nothing to intensified supervision to liquidity injections to interventions into particular institutions.
- Complexities with practical significance:
  - Developments in financial stability cannot be summarized in a single quantitative indicator; no unequivocal unit of measurement exists (contrast with price stability).
  - Developments are inherently difficult to forecast; forward-looking approaches are needed to identify build-up of risks and imbalances; attention should focus on the entire distribution of outcomes, particularly the left "tail."
  - Forecasts of financial stability may be inherently less reliable than monetary/macroeconomic forecasts due to contagion, nonlinearities, and greater fundamental uncertainty (Knight, 1921).
  - Developments in financial stability are only partly controllable; policy instruments often have other primary objectives and impacts on stability can be indirect or frictional; exogenous shocks further limit controllability.
  - Policies aimed at financial stability often involve a trade-off between resilience and efficiency (e.g., higher solvency requirements vs. capital costs; exchange restrictions vs. market efficiency).
  - Policy requirements may be time inconsistent: short-term stability measures (lender-of-last-resort finance, deposit guarantees) can create moral hazard and undermine market discipline over time.

### ANNEX — ALTERNATIVE DEFINITIONS OF FINANCIAL STABILITY (selected quotations)
- John Chant and others (Bank of Canada):
  - Financial instability "refers to conditions in financial markets that harm, or threaten to harm, an economy’s performance through their impact on the working of the financial system...." (pp. 3–4).
- Andrew Crockett (BIS and FSF):
  - Defines financial stability as "an absence of instability" and emphasizes potential for damage, including institutions large or highly interconnected.
- Deutsche Bundesbank:
  - Financial stability "broadly describes a steady state in which the financial system efficiently performs its key economic functions...and is able to do so even in the event of shocks, stress situations, and periods of profound structural change."
- Wim Duisenberg (ECB):
  - Financial stability refers to "the smooth functioning of the key elements that make up the financial system."
- Roger Ferguson (Board of Governors, U.S. Federal Reserve System):
  - Defines financial instability by three criteria: (i) asset prices diverge sharply from fundamentals; and/or (ii) market functioning and credit availability are significantly distorted; with the result that (iii) aggregate spending deviates (or is likely to deviate) significantly from the economy’s ability to produce.
- Michael Foot (U.K. Financial Services Authority):
  - Financial stability where: (a) monetary stability; (b) employment near natural rate; (c) confidence in operation of key financial institutions and markets; (d) no relative price movements undermining (a) or (b).
- Sir Andrew Large:
  - Thinks of financial stability in terms of "maintaining confidence in the financial system"; threats spread via contagion and can cause volatile and unpredictable price changes.
- Frederick Mishkin (Columbia University):
  - Financial instability "occurs when shocks to the financial system interfere with information flow so that the financial system can no longer do its job of channeling funds to those with productive investment opportunities."
- Norges Bank:
  - Financial stability means the financial system "is robust to disturbances in the economy, so that it is able to mediate financing, carry out payments, and redistribute risk in a satisfactory manner."
- Tommaso Padoa-Schioppa (ECB):
  - Financial stability is a condition where the financial system "is able to withstand shocks without giving way to cumulative processes, which impair the allocation of savings to investment opportunities and the processing of payments in the economy."
- Anna Schwartz (NBER):
  - A financial crisis is "fueled by fears that the means of payment will be unobtainable at any price...The essence of a financial crisis is that it is short-lived, ending with a slackening of the public’s demand for additional currency."
- Nout Wellink (De Nederlandsche Bank):
  - A stable financial system "is capable of efficiently allocating resources and absorbing shocks, preventing these from having a disruptive effect on the real economy or on other financial systems...The system itself should not be a source of shocks."

*Document: References (pages and annex content as provided).*

### References

### References

### Cited works

- Chant, John, 2003, “Financial Stability As a Policy Goal,” in Essays on Financial Stability, by John Chant, Alexandra Lai, Mark Illing, and Fred Daniel, Bank of Canada Technical Report No. 95 (Ottawa: Bank of Canada), September, pp. 3–4.  
- Crockett, Andrew, 1997, “The Theory and Practice of Financial Stability,” GEI Newsletter Issue No. 6 (United Kingdom: Gonville and Caius College Cambridge), 11–12 July.  
- Davis, Philip, 2002, “A Typology of Financial Instability,” Financial Stability Report 2 (Vienna: Österreichische Nationalbibliothek).  
- Deutsche Bundesbank (2003), “Report on the Stability of the German Financial System,” Monthly Report, Frankfurt, December.  
- Diamond, Douglas W., and Raghuram G. Rajan, 2001, “Liquidity Risk, Liquidity Creation, and Financial Fragility: A Theory of Banking,” Journal of Political Economy, Vol. 109, 2, pp. 287–327.  
- ——— , 2001, “Banks, Short Term Debt, and Financial Crises: Theory, Policy Implications, and Applications,” Proceedings of Carnegie Rochester Series on Public Policy (Amsterdam: Elsevier Science),Vol. 54, No. 1, pp. 37–71.  
- Duisenberg, Wim F., 2001, “The Contribution of the Euro to Financial Stability,” in Globalization of Financial Markets and Financial Stability—Challenges for Europe (Baden-Baden: Nomos Verlagsgesellschaft), pp. 37–51.  
- Ferguson, Roger, 2002, “Should Financial Stability Be An Explicit Central Bank Objective?” (Washington: Federal Reserve Board).  
- Foot, Michael, 2003, “What Is ‘Financial Stability’ and How Do We Get It?” The Roy Bridge Memorial Lecture (United Kingdom: Financial Services Authority), April 3.  
- Greenspan, Alan, 1999, “Do Efficient Markets Mitigate Financial Crises?” speech delivered before the 1999 Financial Markets Conference of the Federal Reserve Bank of Atlanta.  
- Haldane, Andrew, 2004, “Defining Monetary and Financial Stability” (unpublished; London: Bank of England), February.  
- Houben, Aerdt C.F.J., Jan Kakes, and Garry Schinasi, 2004, “Toward a Framework for Safeguarding Financial Stability,” IMF Working Paper 04/101 (Washington: International Monetary Fund) and DNB Occasional Paper (Amsterdam, Forthcoming).  
- Large, Sir Andrew, 2003, “Financial Stability: Maintaining Confidence in a Complex World,” in Financial Stability Review (London: Bank of England), December, pp. 170–74.  
- - 18 -  
- Mishkin, Frederick, 1999, “Global Financial Instability: Framework, Events, Issues,” Journal of Economic Perspectives, Vol. 13 (Fall), pp. 3–20.  
- Norwegian Central Bank, 2003, Financial Stability Review, February.  
- Padoa-Schioppa, Tomasso, 2003, “Central Banks and Financial Stability: Exploring the Land In Between,” in The Transformation of the European Financial System, ed. by Vitor Gaspar and others (Frankfurt: European Central Bank), pp. 269–310.  
- Schinasi, Garry J., 2003, “Responsibility of Central Banks for Stability in Financial Markets,” in Current Developments in Monetary and Financial Law—Volume 2 (Washington: International Monetary Fund), Chapter 17.  
- ——— , 2004, “Private Finance and Public Policy,” IMF Working Paper 04/120 (Washington: International Monetary Fund).  
- Schwartz, Anna J., 1986, “Real and Pseudo-Financial Crises” in Financial Crises and the World Banking System, ed. by Forrest Capie and Geoffrey E. Woods (New York: St. Martin’s Press).  
- Truman, Edwin, 2003, Inflation Targeting in the World Economy (Washington: Institute for International Economics).  
- Wellink, Nout, 2002, “Current Issues in Central Banking”, (Oranjestad: Central Bank of Aruba), November 14.

*Source: _wp04187 - References*

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