Definition Syariah Financial

Financial system stability is a condition in which the economic mechanism of pricing, allocation of funds and risk management function and sustained economic growth. "

Meaning of financial system stability can be understood by doing research on factors that could cause instability in the financial sector. Instability of the financial system can be triggered by various causes and turmoil. This is generally a combination of market failure, either because of structural and behavioral factors. The failure of the market itself can be sourced from external (international) and internal (domestic). Risks that often accompany the activities in the financial system include credit risk, liquidity risk, market risk and operational risk.

The increasing trend of globalization of financial sector supported by technological developments led to the financial system becomes increasingly integrated with no lag time and boundaries. In addition, the innovation of financial products increasingly dynamic and diverse with a higher complexity. These developments may lead to other sources of financial system instability triggers increased and more diverse, also can cause more difficulties to overcome such instability.

Identification of the source of the instability of financial systems are generally more forward looking (look forward). This is intended to determine the potential risks that will arise and will affect the future condition of the financial system. On the basis of the identification results are then performed analysis of how far the potential risk of becoming more dangerous, widespread and systemic that it can paralyze the economy.