It is a well – known fact that there is a risk in the business. The risk can be of anything, any factor. Be it the changing marketing environment, the competition etc. Recent years, the global economy faced the huge disaster due to the financial crisis. Financial stability is a condition/state/situation where the financial framework/financial system work properly, without any problems. The financial structure of any financial body remains resistant and strong enough to survive against the challenges and change in the market. A strong financial stability is required by every financial institution. Many times businesses suffer loss. To rise up again after the loss, financial support is required. The organization can rise up again if it has a strong financial stability. For the immediate financial support, risk management and payment arrangement, financial stability is required.
The existence of such a macroeconomic with no existence of fluctuations. Financial stability came in to existence during the periods of 1990s. The world faced the East Asian financial crisis. This resulted in a panic situation in the markets. Due to which the IMF with World Bank introduced Financial sector Assessment Program (FSAP 1999) regularizing the strengths and weaknesses of the financial institutions. Financial stability is designed in such a way so that no financial system fails to work. After the financial crisis, the term gained wide economic attention. The financial crisis of 2007 and that of 90s forced the economists to think over it. The then crisis led to failure of many financial institutions. The crisis even led to the failure of government in many countries. An unstable financial condition can impede the progressive development of any economy. It is not predicted that at what time there falls need of financial support. The need of financial stability is most observed during the financial instability. Not all the crises are due to financial instability.
The European Central Bank has described financial stability as:
“A condition in which the financial system which comprises financial intermediaries, markets and market infrastructures – is capable of withstanding shocks and the unravelling of financial imbalances. This mitigates the likelihood of disruptions in the financial intermediation process that are severe enough to significantly impair the allocation of savings to profitable investment opportunities. “(ECB 2011, Financial Stability Review, December).
According to the Reserve Bank of Australia,
“ A stable financial system is one in which financial intermediaries, markets and market infrastructure facilitate the smooth flow of funds between savers and the investors and by doing so, help promote the growth in economic activity.”
Many a times the markets experience financial instability. There can be several consequences. Banks rarely provide finance profitable projects in such periods. There can be deviation in asset prices. Instability can result into hyperinflation or short term stock market crash. If the financial system of any economy fails, the economy also goes down. Economic growth thus depends on the financial stability. A strong stable financial system possesses the potential to bear any market economic shock, economic imbalances. A robust banking and financial system are backbone of any economy. The economy only performs and runs smoothly when there is proper financial stability to support it.
A state of financial stability is required for healthy economical progress of any country. Financial stability and economic growth both are dependent on each other. According to the Global Financial Stability Report by IMF, October 2014, after the six years of crisis, the global economic recovery is dependent on the accommodative monetary policies in advanced economies.
Today, we are living in a global economy. The local markets have merged into the global markets. Due to globalization, the economies are now the global economy. Emerging markets are seen as the key driver of global economy. In such condition, financial stability becomes an important factor to grow ahead. Financial stability is taught to all the finance students to cope up with the marketing problems which can create challenges to smooth economic progress. Writing assignments, case studies, reports and projects on the topic can be difficult for the students. As the study involves lots of practical exposure with good experience in the field, writing assignments of financial stability needs technical and professional approach of the subject. This is the main reason we, at ozassignmenthelp.com.au provide the best online assignment help. Our financial stability online assignment help is designed and prepared by our experienced and professional tutors, who have great experience in the field. They also work with many leading financial institutions. So, the online assignment help offers the best result oriented online assignment help for the students. Contact us today and get the best online assignment help.