Financial System Stability

Financial system stability refers to the resilience of banks, financial markets, and payment systems that facilitate the flow of money and credit in an economy. When the system is stable, it efficiently allocates resources, supports economic growth, and withstands shocks like economic downturns or financial crises. Stability is maintained through proper regulation, risk management, and safeguards that prevent the failure of individual institutions from causing widespread disruptions. Ultimately, a stable financial system helps ensure trust, confidence, and smooth functioning of the economy for individuals, businesses, and governments.