Research on financial stability

Central banks have sophisticated and well-tested models that they can use to help them maintain price stability, but similar work in the field of financial stability is very underdeveloped. The increasingly popular financial stability reviews that are published may contain lots of data, but there is no underlying framework upon which to build analysis.

Modelling financial stability

Charles Goodhart stresses the need to build models of systemic stability, since current micro-prudential models use