Preserving Financial Stability

Economic Issues, January 9, 2006

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Preserving Financial Stability

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Bibliographic details

• Authors: Garry J. Schinasi
• Published: January 9, 2006
• Series: Economic Issues
• DOI: https://doi.org/10.5089/9781589063563.051

Overview

• Spurred by advances in information and computer technologies, financial liberalization and innovation took off in the late 1970s.
• Although the changes in financial markets have been beneficial overall, our understanding of the new risks to financial stability lags behind, as demonstrated by the financial crises of the past couple of decades.
• The study of international financial stability—described as a public good—is still in its infancy.
• The pamphlet aims to stimulate further debate by proposing a definition of financial stability and a broad framework for safeguarding it without inhibiting its dynamic development or limiting its benefits.

Key findings and observations

• Financial innovation and liberalization since the late 1970s have increased market dynamism and generated benefits.
• Gaps in understanding the new risks to financial stability persist, as evidenced by crises in the past couple of decades.
• International financial stability should be treated as a public good, requiring collective attention and study.

Proposed framework and policy implications

• The pamphlet proposes:
  • A definition of financial stability.
  • A broad framework for safeguarding financial stability that seeks to:
  • Preserve dynamic development of financial markets.
  • Avoid limiting the benefits of financial innovation and liberalization.
• Policy emphasis:
  • Strengthen understanding and monitoring of new financial risks.
  • Encourage debate and development of international approaches to financial stability given its public-good characteristics.

Scope and topics covered

• Subject areas:
  • Asset prices
  • Financial institutions
  • Financial sector policy and analysis
  • Financial sector stability
  • Financial services
  • Financial stability assessment
  • Loans
  • Prices
• Keywords highlighted:
  • Asset prices, economy, EI, fiat money, financial asset, financial market indicator, financial risk, Financial sector stability, Financial stability assessment, Global, Loans, market, market confidence, market discipline, market dynamics, market liquidity, market participant, market turbulence, market uncertainty, market volatility, risk

Preserving Financial Stability — Garry J. Schinasi

Content in this bundle

• _issue36a
  • _issue36a (Markdown version)
  • _issue36a (PDF)
• 经济问题 No. 36 - 保持金融稳定
  • 经济问题 No. 36 - 保持金融稳定 (Markdown version)
  • 经济问题 No. 36 - 保持金融稳定 (PDF)
• _issue36s
  • _issue36s (Markdown version)
  • _issue36s (PDF)
• Preserving Financial Stability; Garry Schinasi; Economic Issues 36; Russian; December 12, 2005
  • Preserving Financial Stability; Garry Schinasi; Economic Issues 36; Russian; December 12, 2005 (Markdown version)
  • Preserving Financial Stability; Garry Schinasi; Economic Issues 36; Russian; December 12, 2005 (PDF)