Global Financial Crisis, Risk Management & Financial Stability

Abstract

Global financial crisis in the aftermath of US sub-prime crisis has posed a serious threat to the financial stability. There is a need to draw lessons for future, especially from a financial stability perspective in order to rebuild the global financial architecture. Financial stability ensures efficient and smooth intertemporal allocation of resources, precise assessment and reasonable pricing of financial risks, and comfortable absorption of economic shocks, and therefore, is sine qua non for the economic well-being of any country. As such, restoring sand maintaining financial stability is the biggest challenge for the central banks world over. This paper makes an attempt to provide an insight over these issues.