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Financial Stability and Public Policy: An Overview

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  • Ghosh, Saibal

Abstract

The paper reviews the sources of market failure in financial institutions and markets and what can be done to alleviate them. It examines game-theoretic explanations for financial instability, in particular the role of asymmetric information in generating destabilizing behavior. In the area of remedies, the paper analyses the potential contribution of official safety nets and what can be done to minimize the associated moral hazard. It discusses the role of public policy in this context.

Suggested Citation

  • Ghosh, Saibal, 2001. "Financial Stability and Public Policy: An Overview," MPRA Paper 19757, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:19757
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    File URL: https://mpra.ub.uni-muenchen.de/19757/1/MPRA_paper_19757.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    financial stability; financial institutions; financial markets; financial infrastructure;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G01 - Financial Economics - - General - - - Financial Crises
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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