Global Financial Stability Assessment

Bożena Frączek

This paper focuses on issues of assessment of financial system stability. The author presents basic definition and meaning of financial stability as well as the concept of instability. However, special attention is paid to measurement of financial stability. In this paper is presented the possibility of assessment of financial stability through the prism of the instability which is easier to define and quantify. In many cases, the methods for measuring and assessing financial stability rely on finding and measuring the potential sources of risk that are the causes of instability. An example such approach could be method of assessing the global financial stability which was developed by the International Monetary Fund (IMF) Staff. It take into account four broad risks and two underlying conditions as the underlying factors affecting financial stability. The result of this method is the Global Financial Stability Map GFSM, which shows (graphical representation) the periodic improvement or deterioration in global financial stability through the prism of these factors.