Financial Stability, Monetary Policy And Central Banking: An Overview

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This paper summarizes the works presented at the twelfth Annual Conference at the Central Bank of Chile entitled "Financial Stability, Monetary Policy and Central Banking", held in November 2008 and compiled in a forthcoming book. These works, that include both theoretical and empirical aspects, provide elements to handle financial stability in a globally integrated financial context. Last decade's financial system advances have had a large impact on the development of risk diversification contracts available to investors. The latter, supported on such complex financial contracts, have been able to shift outwards the investment possibilities frontier, thereby generating intricate networks. This has been concurrent with a significant increase of global financial integration, which has facilitated the propagation and expansion of financial shocks.