The financial crisis has signalized the need to reconsider the former micro approach to regulation and supervision of financial institutions. While in the past there was much debate on the scope of micro-prudential supervision on individual banks, there was little debate on macro-prudential supervision to secure the financial system. To achieve this goal an interplay of microprudential and macroprudential authority is needed to identify systemic risks as a key factor of financial stability and verify financial regulation from a systemic risk perspective.
The macroprudential approach focuses on risks arising in foreign financial markets and the impact of financial distress on important financial institutions. The key aspects of current regulatory reforms include measuring and regulating systemic risk, as well as designing macroprudential policies as a tool to manage possible future systemic risk. Currently is questioned how to design an effective macroprudential regulatory framework that achieves the financial stability objective corresponding to microprudential and monetary policy.
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Special Issue of the International Journal of Central Banking on International Prudential Policy Spillovers: Volume 13, Supplement 1, March 2017.
Working and discussion papers
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Gambacorta, L., and A. Pabón (2017). The impact of macroprudential policies and their interaction with monetary policy: an empirical analysis using credit registry data. BIS Working Paper No 636.
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Tayler. W.J., and R. Zilberman (2016). Macroprudential regulation, credit spreads and the role of monetary policy. Bank of England Staff Working Paper No. 599.
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Bank of England (2011). Instruments of macroprudential policy: A discussion paper.
Banque de France (2014). Macroprudential policies: implementation and interactions. Financial Stability Review No. 18.
Bruno, V., I. Shim and H. S. Shin (2015). Effectiveness of macroprudential and capital flow measures in Asia and the Pacific. BIS Papers No 82.
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International Monetary Fund (2013). The interaction of monetary and macroprudential Policies. IMF Policy Paper.
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Lopez,C., D. Markwardt, and K. Savard (2015). Macroprudential policy. Silver bullet or refighting the last war? Milken Insitute Research.
Schoenmaker, D. (2014). Macroprudentialism. www.voxeu.org.