A state in which the financial system is able – to bring the supply and demand for capital smoothly and successfully together at a point where the demand meets the supply, – to allocate scarce resources through money and to the most effective allocation of scarce resources, also called “efficient allocation of financial resources”; whereby it would have to be discussed whether and to what extent № already № includes – pricing risks and passing them on to other market participants (risk takers), – ensuring the secure processing of payments and transfers of value, and – absorbing any disruptions (shocks) to such an extent that the aforementioned tasks are not impaired to any appreciable degree. – Ensuring financial stability cannot, in principle, be a task of monetary policy. This is because the instruments needed for this purpose – such as countercyclical capital requirements for banks or guarantees for endangered institutions – are different in nature and application from the adjusting screws of monetary policy. Therefore, it also makes no sense to demand the safeguarding of financial stability as an additional objective of the central bank. – Financial stability also requires stability elsewhere. This applies above all to a high level of political stability. Monetary stability and a balanced government budget. – See credit default swap linkages, Elizabeth question, financial market shock, financial market stability, financial system, good, public, margin pressure, money-matters theorem, organizations, nonprofit, system conflict, financial market. – Cf. ECB Annual Report 2008, pp. 166 ff. (ECB surveillance), Deutsche Bundesbank Annual Report 2009, pp. 91 ff. (Problems of financial stability in Germany; individual measures in the wake of the financial crisis), Deutsche Bundesbank Monthly Report of October 2010, pp. 27 ff. (General and details on stability in the German banking system; overviews), ECB Annual Report 2010, pp. 154 ff. (basic information on financial stability; differences in individual euro area countries), Monthly Report of the Deutsche Bundesbank of February 2011, p. 68 ff. (steps toward a European stability mechanism), Annual Report 2011 of the ECB, p. 122 ff. (new institutions, Financial Stability Report 2012, p. 17 ff. (sovereign debt crisis endangers financial stability), Monthly Report of the Deutsche Bundesbank of April 2013, p. 47 f. (role of the Bundesbank in the Financial Stability Monitoring Act).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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