Financial stability, monetary policy, and Central Banking
The financial developments of the last decade have had a large impact on the range of risk diversification contracts available to investors. Based on these complex instruments, the investment possibility frontier was shifted outward and increasingly intricate networks were created. At the same time, global financial integration has facilitated the propagation and expansion of financial shocks. The papers in this book,written in 2008-09, discuss risk assessment frameworks, network effects, and the financial crisis. With the financial crisis in the background, theoretical and empirical contributions seek to sketch the tools needed to identify systemic risk, and critique the potential weaknesses of current regulations.Financial stability, monetary policy and Central Banking : an overview / Rodrigo A. Alfaro and Rodrigo Cifuentes S. -- A historical perspective on the crisis of 2007-08 / Michael D. Bordo -- Defining finacial stability and establishing a framework to safeguard it / Garry J. Schinasi -- Toward an operational framework for financial stability : 'fuzzy' measurement andits consequences / Claudio Borio and Mathias Drehmann -- Measuring and managing macrofinancial risk into monetary policy models : application to Chile / Dale F. Gray, Robert C. Merton and Zvi Bodie -- Equity market spillovers in the Americas / Francis X Diebold and Kamil Yilmaz -- Modeling a housing and mortgage crisis / Charles A. E. Goodhart, Dimitrios P. Tsomocos and Alexandros P. Vardoulakis -- The balance sheet channel / Ethan Cohen-Cole and Enrique Martínez-García -- Household financial vulnerability / Marcelo Fuenzalida and Jaime Ruiz-Tagle -- Distress Dependence and financial stability / Miguel A. Segoviano andCharles A. E. Goodhart -- Funding liquidity risk in a quantitative model of systemic stability / David Aikman ... [et al.] -- A network model of super-systemic crises / Prasanna Gai and Sujit Kapadia.