This implies that the financial system is robust to systemic risk. Financial stability allows the financial system to withstand shocks without impairing the processing of payments in the economy, and ultimately, the allocation of savings to investment opportunities. Accordingly, a robust and resilient market infrastructure is key to financial stability.
The interest of central banks in financial stability can be traced as far back as late June 1974, when the closure of the Herstatt bank left transactions half-done due to the time-zone difference between Frankfurt and New York.