Macroprudential policy: opportunities and challenges

Speech by Mr Jaime Caruana, General Manager of the BIS, at the Tenth High-Level Meeting for the Middle East and North Africa region on "Global banking standards and regulatory and supervisory priorities" jointly organised by the Basel Committee on Banking Supervision, the BIS's Financial Stability Institute and the Arab Monetary Fund, Abu Dhabi, United Arab Emirates, 9 December 2014.

Policymakers now have a unique opportunity to build a macroprudential perspective into the post-crisis framework for financial stability. But this also poses new challenges. Sound macroprudential policy requires a deeper knowledge of how effectively the various tools will work, and also how they might interact with monetary and fiscal policy. Moreover, the shift in credit intermediation away from banks to the bond market gives rise to new sources of potential vulnerability that could be difficult to address with existing prudential instruments.