THICK SKIN OR BITTER PILL - THE CHALLENGE OF DEFINING FINANCIAL STABILITY

• https://scindeks.ceon.rs/article.aspx?artid=1451-43541502124D

Summary: At the international and national levels we have recently witnessed an accelerated growth in the new field of public policy, i.e. macroprudential policy. Its goal is to help prevent the occurrence of, or eliminate and mitigate systemic risks in the financial system, thereby achieving and maintaining financial stability. Reference literature does not offer a uniform, generally accepted definition of financial stability. It may be observed that the definitions applied in the past used to be substantially broader and more diverse, having become increasingly precise over time. This has been the result of the complex nature of financial systems and the plethora of factors affecting their stability. Moreover, neither the European legislation nor the national regulations in Serbia explicitly define what is being referred to by the financial system’s stability. The definition of financial stability accepted by the National Bank of Serbia focuses on the functions that the financial system should perform, which corresponds to the broader approach to financial stability.