This paper analyses the concept of financial system stability and how it is practiced as one of the key objectives of a central bank. The paper discusses five main topics related to financial system stability: (i) what is financial system stability and why it is important; (ii) central bank function in maintaining financial system stability; (iii) promoting financial system stability in practice. This topic elaborates research and surveillance activities on the financial system covering financial institutions and markets financial infrastructure domestic finance and international finance; (iv) coordination and cooperation in maintaining financial stability; (v) financial safety nets and crisis management. The paper concludes by posing several key challenges faced by related authorities in creating and maintaning financial system stability.