DOI link for Introduction
The repetition of crisis events and the fragilities in the financial systems are sources of concern not only for the public but also for finance professionals and economists. This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book starts by giving and justifying our definition of financial stability. It recalls that financial activity evolves according to medium-term waves, whose determinants are investigated. The book analyses the euro area sovereign debt crisis and its impact on financial fragmentation as well as international financial spillovers and the role of international capital flows for financial stability in emerging countries. It distinguishes between constraints on financial institutions and constraints on the working of financial markets. The book assesses the new developments associated to bail in and resolution as well as additional requirements. It refers to the role monetary policy, fiscal policy, and structural policies to ensure financial stability.