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Table of content

S.No TOPIC Page.No
1 Introduction  
2 Literature review  
The importance of Financial Stability

Current threats to the stability of the world monetary system

Vulnerability of the banking system

Problems of infrastructure

Asset loses and vs. liabilities

The UK’s biggest threats

4 Theoretical model  
5 Financial Stability of the UK‘s financial system and what actions are being taken to eliminate or decrease any threats to it  
6 The FPC endures to evaluate the local threats separately from those connected to Brexit, remain standard overall.  
7 Risks from global vulnerabilities  
8 How quick economic progress made by China can affect the UK economy?  
9 Conclusion  
10 References  


What are the most important current threats to the stability of the world’s financial system? How could these affect the UK and what can policymakers do to mitigate them?”


The report is about the current threats that are faced by the financial systems and economies globally with special consideration of the effect of these scenarios on the UK and its financial structure. The reports start with the literature review of financial defining the terms like financial stability and then we will examine three main threats to financial system it proceeds with the review of threat that currently faced by the countries around the world collectively or the UK individually as the report’s basic requirement is to define and explain the impact of these threats to the economy of the UK in particular. The conclusion simplifies the finding and reports the actions that are taken in this scenario.

Literature Review

The financial system is a network of organizations comprising of diverse participants, like comprising banks, mutual funds, hedge funds, insurance companies, pension funds, and shadow banks. Each of the participants not only intermingles with each other but also interact directly within the economy. (Acharya and Ryan, 2016)

Financial Stability:

Financial stability is a term where the financial system, comprising the main financial markets and the financial institutions are unaffected by the economic tremors and can carry out basic functions smoothly in difficult situations; it involves the arrangement of payments, intermediate of financial funds and management of risks.

Financial stability is about constructing a financial system that can support and functions equally in difficult and good times, and have the ability to absorb all the glitches that may arise in the economy of UK at any instant; Financial stability does not work forstoppingdisaster or preventingindividuals or companies from losing orearning money. It just provides aid to generatesituations where the structure keeps on working efficientlyalthough faced with difficulties. (Tarazi, 2015)

The importance of Financial Stability:

The financial system plays a critical role in the economy. Financial stability defines the situation where the fiscalintermediation practiceworks effortlessly and there is assurance in the operations of important economic organizations and markets contained by the economy.(Aldasoro and Alves, 2018)…….