The goal of this edited collection put together by Goodhardt (emeritus, banking and finance, London School of Economics, England) and Tsomocos (financial economics, U. of Oxford, England) is to
point the way towards a widely accepted, rigorous framework for financial stability assessment practices of central banks and international organizations. The main element of the approach
presented, which the editors contend promises a quantifiable metric for financial fragility, relies on the equilibrium interaction of liquidity and endogenous default. In addition to presenting
the theoretical framework, the volume’s 15 chapters also present initial applications of the framework with simulations and data from the UK and Columbia and provide a detailed analysis of
endogenous liquidity, default, and collateral. Annotation ©2012 Book News, Inc., Portland, OR (booknews.com)
