Marek Zwolankowski “The Financial Crisis, Financial System Instability and Monetary Transmission Mechanism”, Journal of International Studies, Vol. 4, No 1, 2011, pp. 26-32.

The Financial Crisis, Financial System Instability and Monetary Transmission Mechanism

Marek Zwolankowski

Department of Finance

Faculty of Economics and Management

Szczecin University

zwolankowski1@wp.pl

Abstract. The current financial crisis is also a crisis of cognition. Erroneous strategy of central banks and accommodative monetary policy (primarily of the Fed) have become causes of distortion of the information function of financial assets' prices. Excessive – in favourable monetary conditions – expansion of the global financial system has increased the complexity (ergo non-transparency of information) of financial operations and investment strategies.

Submitted: September, 2011

1^st revision: October, 2011

Accepted: November, 2011

Keywords: Financial Crises, Monetary Transmission Mechanism.