Darmowy fragment publikacji:
Piotr Urbanek – Department of Institutional Economic, Faculty of Economics and Sociology
University of Łódź, 90-214 Łódź, Rewolucji 1905 r. 41/43 Str.
Sławomir J. Bukowski
© Copyright by Uniwersytet Łódzki, Łódź 2013
First Edition. W.06376.13.0.K
Łódź University Press
90-131 Łódź, Lindleya 8
phone (42) 665 58 63, faks (42) 665 58 62
ISBN (wersja drukowana) 978-83-7525-976-6
ISBN (ebook) 978-83-7969-176-0
Table of Contents
Introduction Piotr Urbanek – Corporate Governance in the banking sector: Lessons
from the ﬁ nancial crisis ........................................................................................ 5
Section 1. Czesław Mesjasz, Wojciech Rogowski – Deﬁ nitions of ﬁ nancial stability ... 13
Section 2. Emilia Klepczarek – Soft law as a factor stabilizing the ﬁ nancial system ..... 37
Section 3. Monika Marcinkowska – New order in banking ...............................................55
Section 4. Krzysztof Misiołek – Determinants of corporate governance in banks .......... 71
Section 5. Agnieszka Słomka-Gołębiowska – Banks in Poland in the face of new
regulations on executive remuneration ............................................................. 83
Section 6. Agata Wieczorek – Independent supervisory board members in Polish
public banks ..................................................................................................... 105
Section 7. Krzysztof Postrach – Should Polish banks be domesticated? ....................... 127
Section 8. Piotr Masiukiewicz – Receivership in banking: Theory and practice .......... 141
Section 9. Magdalena Jerzemowska – The main bank system as part of Japanese
corporate governance ...................................................................................... 161
CORPORATE GOVERNANCE IN THE BANKING
SECTOR: LESSONS FROM THE FINANCIAL CRISIS
The ﬁ nancial crisis, symbolized by the collapse of the Lehman Brothers Bank,
once again gave rise to discussion about the standards of corporate governance.
This has been explicitly included in the preamble to the Shareholder Bill of Rights
Act of 2009, adopted by the United States Senate, which states, inter alia, that:
“... among the central causes of the ﬁ nancial and economic crises that the United
States faces today has been a widespread failure of corporate governance.” [The
Library of Congress, 2009]. Hawley et al. [2011, p.3] support such opinion ar-
guing that “…the current ﬁ nancial crisis has, as a part of its origins, a variety of
corporate governance failures”.
However, it seems that such a categorical assessment of the causes of the
current crisis is debatable. There are several threads in the current debate on the
subject. First, it is emphasized that in the early twenty-ﬁ rst century, in response
to pathological practices and corporate crimes occurring in major U.S. and Euro-
pean corporations, major reforms of corporate governance have been undertaken.
Among the areas of corporate governance in which far-reaching changes have
been introduced one ﬁ nds: the standards of ﬁ nancial reporting and ﬁ nancial au-
dit, remuneration policy for corporate management, principles for the functioning
of company boards, the requirements for high transparency, better protection of
the rights of minority shareholders, the guidelines for institutional investors, the
new regulations relating to the corporate market control, and many others. These
changes have created a solid foundation which has signiﬁ cantly raised the quality
of intra-corporate relationships and improved the functioning of the external mar-
ket governance mechanisms. Such corporate governance reforms have fostered
attitudes towards enhancing accountability and responsibility. In this context, the
implementation of existing standards may be the most important issue of the efﬁ -
ciency of corporate governance.
* University of Lodz
There are also opinions that the new standards and institutions of corporate gov-
ernance developed in this period have proved ineffective in face of the threats that
have emerged in the ﬁ nancial services sector. They ask: Why have ﬁ nancial institu-
tions turned out to be resistant to the new regulations of corporate governance? How
did it happen that, in light of the ﬁ nancial crisis, banks have been involved as both
actors and victims? Why some ﬁ nancial institutions have been deeply affected by the
crisis while others have not? The reforms of early in this century were based on the
assumption that the new mechanisms of governance should be versatile enough that
their application should extend to all corporations, regardless of their speciﬁ c charac-
teristics and the sector in which they operate. The crisis has shown that they are not
suitable for the control and monitoring of the new business model of banks, where
risk management and corporate governance are becoming key factors and gover-
nance efﬁ ciency should be assessed to a greater extent from the perspective of the
ﬁ nancial stability of the sector as a whole than from the perspective of the efﬁ ciency
of the institutions within the sector.
There are also more radical views [Sun et al. 2011, p.4]. The proponents of
this approach believe that the weaknesses of corporate governance lie not only
in the fact that existing effective standards are not properly implemented and are
not adapted to the sector’s speciﬁ city, but that the current ﬁ nancial crisis and the
failure of corporate governance prove a fundamental systemic failure of the par-
adigms of the invisible hand of market and of the visible hand of management.
If this statement is correct, one should restore some basic foundations of market
economy, such as shareholder primacy, proﬁ t maximization, rational self-interests
of human behaviour, efﬁ cient markets for corporate control, etc.
In our opinion the second view in the above debate is the most reasonable.
New standards of corporate governance have effectively reduced inefﬁ cient busi-
ness practices occurring earlier in the largest corporations. At the same time, one
can point to several factors that have hindered or prevented their implementation
in the ﬁ nancial sector institutions. An important cause of dysfunction of govern-
ance has been the lack of precision of many standards, which made it possible
for the ﬁ nancial institutions to interpret them too broadly. Often, the use of the
standards was only of a purely formal nature and lacked the methods to assess
their actual implementation. The responsibility of the institutions supervising and
monitoring the ﬁ nancial markets with respect to their implementation of the stand-
ards has not been speciﬁ ed. In many countries, the new standards of corporate
governance have not taken the form of normative acts, mandatory for all entities,
but rather the form of recommendations of international institutions and sectoral
regulations - codes of good practice - applicable only to public companies. Above
Corporate governance in the banking sector: Lessons from the ﬁ nancial crisis
all, there were no provisions designed speciﬁ cally for the ﬁ nancial sector, espe-
cially for banks, i.e. no provisions which would take into account the speciﬁ c
nature of corporate governance in the banking sector.
This was the result of many factors: systemic risk, the scale and nature of
operations, relationships between entities in the banking sector, innovative ﬁ nan-
cial instruments, the complex ownership and control structure in large ﬁ nancial
groups, and rapid changes in the business models of ﬁ nancial institutions. The
“agency problem” found in private corporations concerns, in the case of banks,
the speciﬁ c relationships and conﬂ icts of interest between shareholders and depos-
itors. This creates an additional dimension when compared to other corporations,
because banks are institutions of public trust. The relationship between the entities
of the ﬁ nancial sector and the complex ownership and control structures in large
ﬁ nancial groups increase the systemic risk associated with the operations carried
out in the banking sector. One consequence is that the market mechanism of cor-
porate governance, involving the removal of inefﬁ cient entities by the mechanism
of mergers, acquisitions, and bankruptcies, is less effective in the case of large
ﬁ nancial institutions. Another distinguishing feature of governance in the banking
sector is the duality of the roles of banks, which may at same time be shareholders
and lenders for the same entities. This can lead to a situation where the interests
of banks, as lenders, are contrary to the interests of other shareholders and compa-
nies. The speciﬁ city of corporate governance in banks is also conditioned by the
very nature of the banking business. This is reﬂ ected in the components, structure,
and risk of banks’ assets, as well as in the sources of their funding.
One can identify many areas of banks’ operations in which gaps in the pro-
cedures of corporate governance became particularly evident. These include: re-
muneration policy for managers, supervision performed by the boards of banks,
passive shareholders, and the activities of credit rating agencies. There are re-
lationships between these areas, but the dysfunctionalities associated with risk
management constitute the most important bond that unites them. Risk manage-
ment in banks determines their economic results and their chances for commercial
survival and development.
The key issues include constant identiﬁ cation, assessment, measurement, and
monitoring of risks. Risk management is so important in managing banks that the
solution to this problem cannot be limited to the internal bank procedures that
make up the internal mechanism of corporate governance. Legal and environmen-
tal standards, set by international institutions supervising the ﬁ nancial sector and
by national regulators, should constitute a complementary mechanism supporting
the risk management process.
The book you are holding in your hands can be regarded as a voice in the
debate about the search for effective standards of corporate governance in the
banking sector. Its dominant theme is the current ﬁ nancial crisis, presented pri-
marily from the perspective of developments in the ﬁ nancial markets and the
consequent implications for efforts to reform corporate governance mechanisms.
Particular attention is devoted to the analysis of corporate governance in the Pol-
ish banking sector, which was among the least affected by the global ﬁ nancial
crisis. The ﬁ nancial stability of Polish banks was not threatened and direct in-
tervention by the state was not necessary. There was no loss of conﬁ dence in the
ﬁ nancial market, which could have resulted in liquidity problems. This relatively
good situation of the Polish banking sector raises the natural question about the
causes which led to its position. If one of the main causes of the current cri-
sis was banks’ failure to comply with the principles of corporate governance, it
seems interesting to assess the quality of supervisory procedures applied by Polish
The book consists of nine chapters. In the ﬁ rst chapter Cz. Mesjasz and W. Ro-
gowski deﬁ ne the concept of ﬁ nancial stability in terms of key research issues in
the book. As they point out “... it is commonly agreed that relatively unambiguous
and precise deﬁ nitions and interpretations of the concept of ﬁ nancial stability have
not been elaborated yet ...”. And further that “It may be treated as a paradox that
so many institutions and people emphasize the signiﬁ cance of the term, which
is so poorly deﬁ ned ...”. The authors do not usurp the right to effectively ﬁ ll in
this research gap. At the same time they conclude that “…the deﬁ nitions (of ﬁ -
nancial stability) can be decomposed into dimensions reﬂ ecting characteristics
of the markets and criteria of their assessment, characteristics of the institutions
and criteria of their assessment, and relations between the markets and the institu-
tions – norms and activities…”. Such an approach can signiﬁ cantly facilitate the
examination of the relationships between different concepts of ﬁ nancial stability
and corporate governance.
A new regulatory tool, which is beginning to play an important role as a factor
stabilizing the ﬁ nancial system, is so-called ‘soft law’, i.e. codes of good practice.
E. Klepczarek indicates in her article that soft law instruments are commonly
used in business practice and have a signiﬁ cant impact on the functioning of en-
tities in the ﬁ nancial system. Codes of good practice contribute to systematizing,
organizing and clarifying requirements in terms of ethics, enhancing mutual trust
between market participants. In this way they enforce the use of higher standards
in services rendered by the banks. In addition to the many advantages of this reg-
ulatory solution, her article also highlights the risks involved with it, including in
Corporate governance in the banking sector: Lessons from the ﬁ nancial crisis
particular the use of them as a purely an image-building move rather than a real
attempt to implement pro-consumer attitudes.
The systemic failure in the supervision of banks, exposed by the current ﬁ nan-
cial crisis and ensuing attempts to reform the system, form the subject of M. Mar-
cinkowska’s considerations in the chapter on the new corporate governance in
banking. She adopts the thesis that “... the ﬁ nancial system is as strong as its gov-
ernance practices, the ﬁ nancial stability of its institutions, and the effectiveness of
its market infrastructure. The creation and application of good governance practic-
es is the joint responsibility of market regulators and market participants…” This
indicates that the core elements of an improved, stable and responsible ﬁ nancial
system should include an effective regulatory regime, which must be supported
by high management standards and values as a part of banks’ corporate culture.
This research topic is continued by K. Misiołek in the subsequent paper. He
examines corporate governance in banks from two perspectives. First, banks are
public institutions which require effective legal, institutional, and customary
foundations. But modern banks also take into account in their actions the social
and ﬁ nancial models of corporate operations. These models must be followed by
proper organizational structures and procedures, supported by an adequate corpo-
rate culture ensuring appropriate standards and by incentives for professional and
responsible conduct, which is essential for good governance.
Executive compensation policy in the ﬁ nancial sector institutions is often re-
garded as one of the key factors that led to the current ﬁ nancial crisis. The system-
ic dysfunctions in ﬁ nancial corporations revealed by the current ﬁ nancial crisis
have shown the need for far-reaching reforms. In the subsequent chapter of this
monograph, A. Słomka-Gołębiowska compares recent recommendations of inter-
national organizations to regulate executive pay in the ﬁ nancial services industry
with legal initiatives introduced in Poland. In the second part of her article she
assesses whether the new legal rules have a signiﬁ cant impact on the structure of
the executive compensation in Polish public banks.
The independence of supervisory board members is an institutional solution
which signiﬁ cantly affects the executive compensation policy in banks. The obli-
gation to appoint such persons to serve on the board results from, among others,
codes of good practice. A. Wieczorek analyzes the extent to which the banking
companies listed on the Warsaw Stock Exchange (WSE) observe the regulations
concerning the appointment of independent supervisory board members. She also
tries to determine whether the independent board members are appropriately ed-
ucated and have the proper qualiﬁ cations to perform their tasks on supervisory
There are two key features of the Polish banking sector. First, ownership and
control of banks in Poland are very concentrated, and second, most banks are
controlled by foreign strategic investors which are owned by global ﬁ nancial
groups. K. Postrach raises the question, formulated in the next paper, whether
the current ownership structure of banks operating in Poland is beneﬁ cial for the
Polish economy and whether there is an alternative solution to this situation. He
concludes that, “…it would be advisable to request relevant institutions (the Pol-
ish Financial Supervision Authority, the National Bank of Poland, and the gov-
ernment) to increase the share of locally controlled banks in the assets of the
Polish banking sector. This process can be described as the domestication of
One of the major causes of bankruptcies is dysfunctions in ownership super-
vision, including insufﬁ cient use of an early warning system. Business practice
provides a lot of evidence in this regard, but the latest international ﬁ nancial crisis
is a real laboratory, full of examples of the lack of such supervision. P. Masiuk-
iewicz indicates in his article that receivership management is an effective legal
and managerial tool for the rehabilitation of banks, but regulations in this ﬁ eld are
insufﬁ cient in Poland.
The last chapter of the book presents the main bank system, which determines
relationships in the process of corporate governance between companies and insti-
tutions in the ﬁ nancial sector in Japan. M. Jerzemowska in her article points to the
origins and main characteristics of this speciﬁ c institutional arrangement, which
differs substantially from the Anglo-American model. The confrontation of these
two different models of corporate governance does not lead to a clear-cut assess-
ment concerning which of them ensures better efﬁ ciency of corporate governance.
The book that we would like to recommend to you refers to current develop-
ments observed in both the Polish and global economy. It is one of the ﬁ rst titles
on the Polish market dedicated to assessment of the role of mechanisms of cor-
porate governance in the banking sector. These developments increase the need
for reliable, systematic knowledge on the subject. We hope that the articles in this
book illustrate, in an original way, many of these developments. Where it was not
possible to formulate clear assessments and answers, the threads elaborated in
this book may be a valuable contribution to further in-depth discussion between
academia and business.
Corporate governance in the banking sector: Lessons from the ﬁ nancial crisis
1. Hawley, J.P., Kamath, S.J., and Williams, T. 2011, Corporate Governance
Failures. The Role of Institutional Investors in the Global Financial Crisis,
University of Pennsylvania Press, Philadelphia.
2. Sun, W. Steward, J. , and Pollard D. 2011. Corporate Governance and the Glo-
bal Financial Crisis. International Perspectives, University Cambridge Press.
3. The Library of Congress 2009. Shareholder Bill of Rights Act of 2009, S. 1074.
DEFINITIONS OF FINANCIAL STABILITY
“Stability, that much overburdened word with unstabilized deﬁ nition”1
Any survey of the literature in ﬁ nance and banking leads to a conclusion that
a state of affairs described as “ﬁ nancial stability” is undoubtedly an important
idea for the theory and practice in those areas. At the same time, it is commonly
agreed that relatively unambiguous and precise deﬁ nitions and interpretations of
the concept of ﬁ nancial stability have not been elaborated yet.
It may be argued that, with a few exceptions, the works by F. Mishkin [1991,
1999], and ﬁ rst and foremost, Schinasi , plus several more recent works
by M. Čihák et al. [2006, 2012], those who discuss ﬁ nancial stability do not have
any clear vision what that term may mean. The utterance “ﬁ nancial stability” is
usually applied as an interpretation of some results in purely “technical” consid-
erations, when the term “risk” alone seems to be irrelevant or not too fashionable
[Beck, 1999; Luhmann, 1991]2. At the same time ﬁ nancial stability is applied as
a kind of “mantra” or “trendy buzzword” in the language of grand theories and in
policy making. It may be treated as a paradox that so many institutions and people
emphasize signiﬁ cance of the term, which is so poorly deﬁ ned.
This observation can be strengthened by the fact that in majority of consid-
erations on ﬁ nancial stability no links are made to the meaning of such ideas as
equilibrium and stability in economics, and in ﬁ nance, not mentioning systems
thinking. In addition, such issues as predictability/prediction and possible control
* University of Economics, Cracow, Poland.
** Economic Institute of National Bank of Poland, Warsaw School of Economics, Warsaw, Poland,
Allerhand Institute, Cracow, Poland.
1 See: Bellman ; Ashby [1963, p.73].
2 Applications of the term “risk” in the “Risk Society” require separate considerations due to multi-
tude of its interpretations, also in quantitative formal considerations.
Czesław Mesjasz, Wojciech Rogowski
of ﬁ nancial systems/markets/phenomena are absent in most of the works in which
the notion “ﬁ nancial stability” is referred to.
The explanation of such a situation is stemming from the fact that the term
ﬁ nancial stability should be treated as metaphor and/or analogy. Knowing the pat-
terns how the meaning of the metaphor of ﬁ nancial stability is “emerging” in
economic discourse, it should be possible to make an attempt to deﬁ ne it in a way
which could be helpful both for possible further operationalizations and for more
precise interpretations in theory and in policy making.
Applications of analogies and metaphors taken from physics, natural sciences
and engineering have been an important factor in development of social sciences
and economics. First and foremost, they are used to describe phenomena in one
area with concepts drawn from another discipline e.g. the equilibrium of various
physical systems – mechanic, thermodynamic, serving as a foundation of the con-
cept of economic equilibrium. If they are employed as a tool for analysis, i.e. to
describe causal relationships, predictions, or as predictive or normative catego-
ries, they always have to be deﬁ ned in a more precise way than it is required for
descriptive purposes. The importance of this challenge becomes even more vital
when such concepts enter the language of policy making.
The disagreement and the absence of precision in deﬁ ning may lead to the
situation that the term “ﬁ nancial stability” becomes a carrier of many positive and,
at the same time, declarative features of ﬁ nance at national and international level,
but with a very low cognitive value translating into a limited applicability. Con-
sidering the above, the concept of ﬁ nancial stability gains a very positive connota-
tion, although it may have different meaning for theorists and for practitioners in
day-to-day practice. This may cause the distortions in the communication process-
es between the various institutions investigating the problem area. Furthermore, it
may restrict the usefulness of the term “ﬁ nancial stability”, if not undermining the
very reasons for its use in theory and policy making. .
The aim of the paper is to elaborate a preliminary survey of deﬁ nitions and in-
terpretations of ﬁ nancial stability. It may be asserted that it will never be possible
to elaborate more precise explicit, “working” deﬁ nitions of “ﬁ nancial stability”.
Perhaps some operationalizations can be achievable. Instead, it is only possible to
make an inventory of applications and interpretations of the term ﬁ nancial stabil-
ity in the language of theory and policy making in ﬁ nance at the macroeconomic
level. Having such an inventory it will be possible to elaborate a typology of in-
terpretations of ﬁ nancial stability and study in depth the diverse meanings of that
Deﬁ nitions of ﬁ nancial stability
1. Stability in economics and social sciences
1.1. Stability in systems thinking
The concepts of equilibrium and stability were introduced ﬁ rstly in mathe-
matics and later were transferred to other areas – physics, biology, automatic con-
trol, etc. Subsequently, they have also become the key concepts of economics and
social sciences. As to achieve the broadest possible scope of the applications of
the concepts of equilibrium and stability, a reference to systems thinking can be
It must be also underlined that the concepts taken from systems thinking can
be used in economics and in social sciences either as mathematical models of
different scope of relevance to the real situation or as metaphors and/or analogies.
The concept of stability is always analyzed in reference to an idea of equi-
librium. In traditional systems thinking based upon ﬁ rst order cybernetics and/or
theory of automatic control systems only the stable equilibria are predominantly
valuable subject of investigation.
Mirroring the aforementioned areas of existence of equilibrium, in the discus-
sion on system stability two important issues have to be distinguished:
● stability of equilibrium (equilibria),
● stability of the system treated as an entity.
The origins of discussion on stability in systems thinking can be traced in the
works of Bellman whose concepts, developing the ideas of Lyapunov and Poin-
care proved applicable in mathematical modelling of automatic control systems
[Bellman, 1953]. In cybernetics stability is regarded as positive state even as an
increased plausibility of survival, although with some exceptions [Ashby, 1963,
p. 81]. Methods used to analyse stability are based upon differential equations
and difference equations, depending whether the phenomena are of continuous or
It can be thus summarized that in any deﬁ nitions of stability relating to a sys-
tem understood as a “set of elements standing in interaction” the following issues
should be taken into account:
1. System identiﬁ ed by an observer described with a set of characteristics
2. Patterns of macro- and microscopic of dynamics of the systems described
with the use of the characteristics.
3. Inﬂ uence of the dynamics of the parameters upon the entire system.
3 Broadly deﬁ ned system thinking includes also cybernetics and complex systems studies. Relations
between systems thinking and cybernetics were discussed in Mesjasz ; Mesjasz .
Czesław Mesjasz, Wojciech Rogowski
4. States of equilibrium for the parameters
5. Mechanisms (internal or external) of restoring equilibrium, i.e. mechanisms
of achieving stability of parameters.
6. Relation between stability of parameters and of the entire system.
It is obvious that the links between stability of characteristics and stability
of entire system may have a very complex character. However, in some cases
a limited set of parameters and sometimes even a single representative parameter,
which permit to describe macroscopic dynamics of entire system, e.g. entropy in
1.2. Stability in economics
The term stability used in social sciences and in economics, including ob-
viously ﬁ nancial stability, is applied either as a metaphor, metonymy, simile or
analogy. In order to simplify the considerations it can be assumed that stability
can be treated as a metaphor and other forms of transfer of meaning should be also
considered in some cases4. Therefore it can be viewed as an idea brought to so-
cial sciences and economics from natural sciences, predominantly from physics.
Such a phenomenon is not rare in history in economic thought [Mirowski, 1989;
Metaphors in social sciences can be used for the following approaches: de-
scriptive, explanatory, predictive, normative, prescriptive, regulatory, retrospec-
tive, retrodictive. The notion stability can be associated with mathematics and
physics, or in a somehow broader sense, with systems thinking, systems approach,
whatever we may call it. It can be also easily traced in history of economic thought
that analogies and metaphors taken from “science” (systems thinking) acquire
a speciﬁ c normative sense. Due to their origins in „rationalist” disciplines - math-
ematics, physics, chemistry and biology they are treated as objective and scientiﬁ c
in a rationalist sense. Thus their applications, in addition to enhanced explanative
validity, by deﬁ nition obtain supplemental, „sound”, normative - predictive and
prescriptive, legit imacy in any debate on social issues. Consequently, in those
applications, but not only, their metaphoric sense is neglected or misinterpreted.
There are also other kinds of stability applicable in economics. In addition to
structural stability, the divide between static and dynamic stability should be men-
tioned. Static stability indicates whether the economic forces that exert an impact
on the system tend to make it move towards the equilibrium point, but does not ex-
plain the actual path of the system nor whether the system converges over time to
4 Metaphors are widely discussed in: Ortony ; Tsoukas ; Lakoff and Johnson ;
Deﬁ nitions of ﬁ nancial stability
the equilibrium point. The dynamic stability, based on functional analysis is more
relevant to economic problems. In economic studies an already mentioned idea
of orbitally stable behavior of the systems with periodic motion can be applied.
Other types of stability useful in economic studies are distinguished according to
the methods of its analysis - local and global stability study as well as “built-in”
and “superimposed” dynamic stability analysis [Eatwell et al., 1987, p. 462].
Looking from the point of view systems thinking it may be stated that eco-
nomic systems (organizations) can also behave in a way which could be captured
with already mentioned idea of ultrastability. In such case in modern writings
in economics and management an idea of learning organization (system) can be
The cybernetical interpretation of stability has an impact on the new institu-
tionalist economics, where stability is thematized as the stability of institutional
arrangements. As D. North puts it: “A basic function of institutions is to pro-
vide stability and continuity by dampening the effects of relative price changes”
[North, 1997]. Such an approach creates additional challenge since institutions
are also changeable so the universal value is undermined. The concept of stability
in stability policy opens the possibility for measuring instability as the deviation
from goals and targets.
Even this superﬁ cial survey shows that stability in economics cannot be in-
terpreted unequivocally. The difﬁ culties are rooted in discrepancies in deﬁ ning
equilibrium in economics, and subsequently, are also resulting from differing in-
terpretations of stability.
Preliminary assertions of stability expose its positive interpretations, similarly
as in other areas of systems thinking, including social sciences. Similarly as in
general considerations, stability understood as a tendency or at least expression
of a tendency to remain in a steady state, cannot be treated in economics as an
absolute positive and desirable state of affairs.
2. Origins of the concept of ﬁ nancial stability
Although it is commonly agreed that there is not any more or less speciﬁ c
deﬁ nition of ﬁ nancial stability, yet many theoreticians and policy makers claim
that this concept reﬂ ects a desired status of different kinds of ﬁ nancial systems.
The search for origins of the term ﬁ nancial stability shows that it was emerging in
policy considerations and in academic research as a consequence of disturbances
of the ﬁ nancial markets. The results of an „archeological” search for the ﬁ rst ap-
plications of the concept of ﬁ nancial stability are of a very preliminary character.
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