Defining Financial Stability

Garry J. Schinasi ()

No 04/187, IMF Working Papers from International Monetary Fund

Abstract: The main objective of this paper is to propose a definition of financial stability that has some practical and operational relevance. Financial stability is defined in terms of its ability to facilitate and enhance economic processes, manage risks, and absorb shocks. Moreover, financial stability is considered a continuum: changeable over time and consistent with multiple combinations of the constituent elements of finance. The paper also discusses several practical implications of the definition that should be considered when using it for policy analysis or developing an analytical framework.

Keywords: Financial stability; Financial crisis (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fin, nep-fmk and nep-sea
Date: 2004-10-13
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