How Central Banks Manage Financial Stability

Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates · Oct 23, 2026 · 13m · transcript

Central banks have evolved from inflation hunters to guardians of financial stability. This episode explores how the Federal Reserve and other major institutions use tools like liquidity facilities, capital requirements, and macroprudential oversight to prevent systemic crises. We look at the shift from pure price targeting to a broader mandate that includes monitoring credit bubbles and shadow banking risks. With Lucas and Luna breaking down specific mechanisms like the discount window and stress testing protocols, listeners will understand why central bankers now worry as much about bank…