This article examines the theoretical foundations of financial stability and liquidity as core categories of financial science, focusing on their conceptual distinctiveness and systemic interdependence within modern banking institutions. Financial stability is analyzed as a multidimensional construct encompassing capital adequacy, asset quality, earnings performance, and risk resilience, while liquidity is treated as the capacity of an institution to meet its financial obligations without incurring unacceptable losses. The study investigates the transmission mechanisms through which liquidity shocks propagate into systemic instability, drawing on the frameworks of Basel III, institutional risk theory, and modern financial intermediation theory. Empirical patterns from global financial crises are used to illustrate how liquidity deficits trigger solvency deterioration under stress conditions. The article further explores regulatory and macroprudential tools employed to manage the stability-liquidity nexus, including the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). The findings suggest that sustainable financial stability cannot be achieved without embedding robust liquidity management frameworks at both the institutional and systemic levels.
Dadamirzayev G`ulomjon Olimjonovich (2026) studied this question.