Influence of transformation processes of economy on financial stability

Abstract

Financial stability is a basis of thriving economy. Frequent financial crises destroy anticipated growth effects of economy after introducing financial liberalisation. Negative effects of crises appear to be the strongest in transition countries. Over a century scientists work on creating methodologies of dealing with financial stability, on creating models of assessing financial stability levels, identifying sources of financial instability, and the ways of diminishing effects stemming from these sources. Nevertheless, it is evident that the problem is not solved yet. Fostering financial stability requires comprehensive knowledge of causes of financial instability, which are discussed in this paper.