Financial stability can be defined as a condition in which the financial system – which comprises financial intermediaries, markets and market infrastructures – is capable of withstanding shocks and the unravelling of financial imbalances.
This mitigates the prospect of disruptions in the financial intermediation process that are severe enough to adversely impact real economic activity.
Sharp falls in global asset prices
Weak profitability of banks jeopardising credit supply
Concerns over debt sustainability
Liquidity risks in the investment fund sector