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Our Financial Structures—Are They Prepared for Financial Instability?
Author(s) -
ROSENGREN ERIC S.
Publication year - 2014
Publication title -
journal of money, credit and banking
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.763
H-Index - 108
eISSN - 1538-4616
pISSN - 0022-2879
DOI - 10.1111/jmcb.12084
Subject(s) - citation , financial crisis , editorial board , economics , business , management , library science , finance , political science , financial system , keynesian economics , law , computer science
Problems in financial markets and at financial intermediaries can and do spill over into the real economy. As a result, a variety of actions have been taken since the severe financial stresses of 2008 to strengthen the financial infrastructure and make banks more resilient in the face of adverse shocks. While many banks have improved their capital and liquidity positions since 2008, in 2012 we still see in the headlines of newspapers around the world that financial stability remains very much an issue. In some ways, central bankers must approach the issue of financial stability much like a structural engineer. Where are the potential stresses in the system? Under what circumstances could those stresses be particularly problematic? Most importantly, what remedial actions could reduce the possibility of an unstable outcome?