Analysis of new approaches to identifying risks and ensuring financial stability in modern national financial systems

Abstract

This paper explores new approaches to identifying financial stability risks and implementing financial stability policies in the contemporary national financial systems. The need for new approaches is primarily explained by a dramatic expansion of the range of financial stability risks due to the increasingly important role of non-banking financial institutions and financial markets in the operation of financial systems, as well as the growing financial inclusion of firms and households. The problems of assessing financial stability are given a special focus. Based on the analysis of financial stability metrics used by the world’s leading central banks and recommended by international financial organizations, the authors formulate proposals for modernizing the system of financial stability indicators used by the Bank of Russia. We formulated proposals on measures to protect the domestic market from external shocks arising from changes in the monetary policy conducted by the world’s leading central banks; on accounting for the expanded range of financial stability risks; and on harmonizing financial stability policies with other areas of financial development.

Full document