Financial Stability and Public Policy: An Overview

Saibal Ghosh

MPRA Paper from University Library of Munich, Germany

Abstract: The paper reviews the sources of market failure in financial institutions and markets and what can be done to alleviate them. It examines game-theoretic explanations for financial instability, in particular the role of asymmetric information in generating destabilizing behavior. In the area of remedies, the paper analyses the potential contribution of official safety nets and what can be done to minimize the associated moral hazard. It discusses the role of public policy in this context.

Keywords: financial stability; financial institutions; financial markets; financial infrastructure (search for similar items in EconPapers)
JEL-codes: E60 G00 G01 (search for similar items in EconPapers)
Date: 2001-01
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Published in Reserve Bank of India Occasional Papers 1 (2001): pp. 109-131

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:19757

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