AbstractThe following sections are included:The Rediscovery of Financial Stability by the Central Banking Community of the Advanced EconomiesFinancial Stability: What is It?PreventionRegulate Risky Behavior, Not InstitutionsRegulation and Resolution Need to be Global in ScopeMacroprudential...

The paper presents a non-technical survey of some of the issues involved in the design of stabilization policy in developing countries with special emphasis on policy responses to external shocks. First, the six most important external economic parameters of developing countries are reviewed: 1)...