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The Concept of Financial Stability in Theory and Law

Author

Listed:
  • Janos Kalman

    (Szechenyi Istvan University)

Abstract

State intervention in the functioning of the economy is necessarily based on some public interests, which may serve as a reason for restrictive state action against the individual, or their freedoms and rights. In legislation, financial stability can be identified as a form of public interest, whereby the need to define the substance of the concept is expressed as an expectation towards the legislator, all the more so because it forms the basis of significant administrative intervention of the public authority type. The study analyses how the concept of financial stability appears in the literature, in legislation and in legal enforcement. Although the concept of financial stability is strongly reflected in the theoretical literature and even in legislation and legal enforcement, its substance is difficult to capture and has evolved constantly. In view of the above, the author offers a definition for the general legal concept of financial stability.

Suggested Citation

  • Janos Kalman, 2023. "The Concept of Financial Stability in Theory and Law," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 22(2), pages 54-76.
    • Handle: RePEc:mnb:finrev:v:22:y:2023:i:2:p:54-76
    as

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    References listed on IDEAS

    as
    1. Frederic S. Mishkin, 1999. "Global Financial Instability: Framework, Events, Issues," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 3-20, Fall.
    2. Noyer, C., 2014. "Macroprudential policy: from theory to implementation," Financial Stability Review, Banque de France, issue 18, pages 7-12, April.
    3. Franklin Allen, 2005. "Modelling Financial Instability," National Institute Economic Review, National Institute of Economic and Social Research, vol. 192(1), pages 57-67, April.
    4. Mr. Udaibir S Das & Mr. Marc G Quintyn & Miss Kina Chenard, 2004. "Does Regulatory Governance Matter for Financial System Stability? An Empirical Analysis," IMF Working Papers 2004/089, International Monetary Fund.
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    JEL classification:

    • K1 - Law and Economics - - Basic Areas of Law
    • K20 - Law and Economics - - Regulation and Business Law - - - General

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