The relationship between financial stability risks and the real economy

Dr Greg Farrell from Wits will present this seminar hosted by the School of Economic and Business Sciences.

Following the global financial crisis, the mandates of many central banks around the world, South Africa included, have been expanded to encompass both price and financial stability. The monitoring and modelling required for the new financial stability mandate differs in important ways from what is required for the price stability mandate, most notably in its focus on systemic risk, the risk that a single event could result in system-wide financial instability, with severe impacts on real economic growth. How to monitor macroeconomic tails risks originating from financial-sector vulnerabilities is therefore a key question for macroprudential policymakers.

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