Abstract: This chapter provides a selective summary of recent work in a number of areas relating to debt, fragility, and instability. First, four issues relating to bank debt are probed, namely real estate lending, pricing of risk, the putative decline of the banking sector, and the ’credit channel’ of monetary transmission. Following this, issues in securities markets relating to risk in derivatives, market liquidity risk, and the relation of institutional investors to financial instability are outlined. In a final section, the linking issue of risk in payments and settlements systems is considered. In each case, the aim is to provide the reader with a basic discussion of the relevant issues and with references for further reading on the topic concerned.

Keywords: banking sector, derivatives, financial instability, institutional investors, market liquidity, monetary transmission, real estate lending, risk, risk pricing, settlements systems,