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Dr.G. Vengatesan

Dr.S. Shankarii

Mrs.Shanthana Lakshmi R

Abstract

A thorough analysis of the stock market stabilizing strategies used by governments, central banks, and regulatory organizations is given in this book chapter. It is critical to comprehend the complex web of policies intended to promote stability in a dynamic, volatile, and uncertain global financial environment. This chapter explores the many facets of market stabilization, including fiscal and monetary policy tools.The chapter starts with a discussion of monetary policy and then clarifies how central banks control the interest rate and use other non-traditional instruments such as quantitative easing to affect the state of the economy and maintain stock market stability. It delves deeper into how communication tactics, currency rate considerations, and liquidity injections affect market expectations.
The chapter examines fiscal policy interventions, which go beyond monetary levers, showing how stimulus packages, tax breaks, and government expenditure all support stable stock markets. The intricate roles that sector-specific support programs, responsible debt management, and regulatory actions play in enhancing economic resilience and market confidence are examined.The chapter highlights the mutually beneficial interaction between fiscal and monetary policy, emphasizing the value of a flexible and well-coordinated strategy. It also emphasizes how important regulatory frameworks are to maintaining investor confidence and market integrity. Real-world case studies provide useful insights into the implementation and efficacy of these policies. Examples include responses to the 2008 financial crisis and the difficulties presented by the COVID-19 epidemic.

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