Volumen 15: 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.

Editor: Rodrigo A. Alfaro.




"This is an excellent conference volume and extremely valuable reading for those seeking to understand the roots of the global financial crisis, along with policy proposals to deal with its aftermath and avoid its reoccurrence. The papers focus on important measurement issues that are often underplayed in the academic literature and specific policy proposals, many of which are now in the process of being implemented. I highly recommend the book to anyone seeking to understand the financial crisis from the perspective of academics and policy practioners who were conducting their analysis as events unfolded in real time."

Simon Gilchrist Boston University.

"The financial system is highly complex. And although we understand many of the factors behind financial decisions, we do not yet have a good way of handling their interactions.Similarly,we understand various mechanisms of how financial shocks get transmitted to the real economy, but we do not yet have a model that is able to incorporate all these channels. As a consequence, assessing the stability of a financial system is a difficult task. The papers in this volume give a good idea of how central bankers and academics are coping with these difficulties. It combines papers describing the challenges of financial stability analysis with real-life applications of the most important analytical methods. I am not aware of any other source that gives such a comprehensive overview of the field."

Christian Upper, Bank for International Settlements

"The 2007–08 financial crisis was a harsh reminder of the importance of periodically revisiting accepted ideas about macro-prudential policies. It also highlighted the ever-changing challenges for monetary authorities and regulators. The comprehensive compilation of recent theoretical advances and lessons learned from the crisis that is found in this new volume of the Series on Central Banking, Analysis, and Economic Policies makes it a timely and highly valuable publication for academic economists and economic authorities everywhere."

José Darío Uribe, Governor of the Banco de la República, Colombia