We study the dynamics of a quantum system having Hilbert space of finite dimension dH. Instabilities are possible provided that the master equation governing the system's dynamics contain nonlinear terms. Here we consider the nonlinear master equation derived by Grabert. The dynamics near a fixed point is analyzed by using the method of linearization, and by evaluating the eigenvalues of the Jacobian matrix. We find that all these eigenvalues are non-negative, and conclude that the fixed point is stable. This finding raises the question: under what conditions instability is possible in a quantum system having finite dH?