When it comes to definitions, financial stability is akin to the famous giraffe. It’s hard to describe, but you know it when you see it. Or rather: you know it when you no longer see it.
Our experts think of financial stability as a condition in which the financial system, including financial intermediaries, markets and market infrastructures, is capable of withstanding shocks and the unravelling of financial imbalances. Only a resilient financial system is able to support the real economy during a potential shock. The definition of financial stability is quite broad, I have to admit.