Research on the Vulnerability and Stability of the Financial System

Author: Xiang Xinmin
Publisher:
Publish Date: 2005-06-01
Features: The financial system is an open, complex, and massive system, as well as a dynamic system far from equilibrium. In the specific process of financial operation, numerous unstable factors cause the "hidden and visible" financial fragility to manifest as macro-financial risks, and sometimes to escalate into financial crises. However, "there is no universally accepted formula for defining financial stability, nor is there a good method to quantify it." This book applies the fundamental theories of systems science and combines economic and financial theories to conduct an in-depth analysis of the unstable factors and economic and financial variables in the operation of the economy and finance. It argues that the orderly parameter nature of expectations allows financial regulation to leverage the self-stabilization and mutual-stabilization of systems, normalizing anti-expectations as the direct objective of monetary policy, thereby bringing the overall supply and demand back to the vicinity of equilibrium.