«Financial bubbles» and monetary policy

Abstract

Purpose: the article is devoted to analysis of the problem of crises in the financial markets based on inadequate financial assets value growth, due to subjective reasons than to objective. Discussion: the mechanism of occurrence of the crisis on the financial market based on the balance effect. The rate of formation of the crisis directly depends on the speed of credit expansion, aimed at acquiring certain assets. The authors believe that the authorized institutions should control not only the amount of money supply, but also the formation of the credit market, credit conditions. Results: the Authors have developed proposals to prevent the crisis in the financial markets due to the credit expansion. The necessity to develop the system controller risk assessment on existing and newly introduced financial instruments, with their mandatory application of commercial banks and rating agencies.