Financial stability
It's the financial stability overview, its indicators and crises .
On 9-10 October 2000, the BIS hosted its annual autumn meeting of central bank economists. The topic of the meeting was “Marrying the macro- and microprudential dimensions of financial stability”.
With a view to stimulating debate on and study of this important topic, this volume makes available the papers discussed at the meeting. These papers address three broad policy questions:
(i) How do central banks monitor the risk of financial instability?
(ii) What mechanisms amplify or dampen financial cycles?
(iii) How should policymakers respond to developments that pose a threat to the stability of the financial system?
Recent years have seen central banks pay increased attention to monitoring the risk of financial instability. As the papers in this volume illustrate, the approaches adopted by various central banks have much in common, although there are certain important differences. Some central banks rely mainly on aggregate macroeconomic and prudential data, while others make extensive use of supervisory data on individual financial institutions. Moreover, some central banks rely heavily on models of the financial sector, while others use a more eclectic approach. Overall, the work on indicators of financial stability has led to a more focussed analysis and a greater understanding of the aggregate risks to the financial system, even if it has not led to the development of a simple indicator of financial stability.
A theme that pervades a number of the papers in the volume is the recurrence of financial cycles.
These cycles are often characterised by rapid increases in credit and asset prices, and often end with some form of financial system stress. The papers discuss the factors driving these cycles, including the tendency for assessments of and attitudes to risk to be procyclical, incentive structures that encourage short-termism
On 9-10 October 2000, the BIS hosted its annual autumn meeting of central bank economists. The topic of the meeting was “Marrying the macro- and microprudential dimensions of financial stability”.
With a view to stimulating debate on and study of this important topic, this volume makes available the papers discussed at the meeting. These papers address three broad policy questions:
(i) How do central banks monitor the risk of financial instability?
(ii) What mechanisms amplify or dampen financial cycles?
(iii) How should policymakers respond to developments that pose a threat to the stability of the financial system?
Recent years have seen central banks pay increased attention to monitoring the risk of financial instability. As the papers in this volume illustrate, the approaches adopted by various central banks have much in common, although there are certain important differences. Some central banks rely mainly on aggregate macroeconomic and prudential data, while others make extensive use of supervisory data on individual financial institutions. Moreover, some central banks rely heavily on models of the financial sector, while others use a more eclectic approach. Overall, the work on indicators of financial stability has led to a more focussed analysis and a greater understanding of the aggregate risks to the financial system, even if it has not led to the development of a simple indicator of financial stability.
A theme that pervades a number of the papers in the volume is the recurrence of financial cycles.
These cycles are often characterised by rapid increases in credit and asset prices, and often end with some form of financial system stress. The papers discuss the factors driving these cycles, including the tendency for assessments of and attitudes to risk to be procyclical, incentive structures that encourage short-termism