## Safeguarding Financial Stability: Theory and Practice

_Books, December 12, 2005_

## Source details

**Canonical URL:** [Safeguarding Financial Stability: Theory and Practice](https://www.imf.org/en/publications/books/issues/2016/12/31/safeguarding-financial-stability-theory-and-practice-18100)

## Other formats

- [Markdown version](/en/publications/books/issues/2016/12/31/safeguarding-financial-stability-theory-and-practice-18100/index.md)
- [Structured JSON version](/en/publications/books/issues/2016/12/31/safeguarding-financial-stability-theory-and-practice-18100/index.json)
- [Bundle manifest](/en/publications/books/issues/2016/12/31/safeguarding-financial-stability-theory-and-practice-18100/bundle-manifest.json)

## Bibliographic details
- Authors: Garry J. Schinasi
- Published: December 12, 2005
- Series: Books
- DOI: https://doi.org/10.5089/9781589064409.071

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### Overview
- How is finance related to economic processes, and why should it be viewed as a public good requiring policy action? This book provides an answer.
- The book develops a practical framework for safeguarding financial stability, which encompasses both prevention and resolution of problems.
- It examines on-going and future challenges to financial stability posed by globalization, a growing reliance on derivatives and their markets, and the capital market activities of insurers and reinsurers.

### Framework and key themes
- Practical framework for safeguarding financial stability covering:
  - Prevention of financial disturbances.
  - Resolution of financial problems when they occur.
- Emphasis on viewing finance as a public good that warrants policy intervention.
- Focus areas include financial regulation and supervision, market discipline, and financial sector policy and analysis.

### Challenges and focal issues identified
- Globalization as a source of on-going and future challenges to financial stability.
- Growing reliance on derivatives and their markets.
- Capital market activities of insurers and reinsurers and their implications for stability.
- Related sectors and concepts addressed: Credit, Credit risk, Financial institutions, Financial markets, Insurance companies, Money, and market imperfections.

### Policy orientation and implications
- Policies should balance prevention and resolution capabilities to safeguard financial stability.
- Regulation and supervision need to account for cross-border/globalized financial linkages.
- Oversight of derivative markets and capital market activities of insurers and reinsurers is necessary to mitigate systemic risk.
- Market discipline and measures addressing market imperfection are relevant components of the overall policy approach.

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## Content in this bundle

- **Safeguarding Financial Stability: Theory and Practice; December 12, 2005**
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_Source: https://www.imf.org/en/publications/books/issues/2016/12/31/safeguarding-financial-stability-theory-and-practice-18100_