Post-crisis, macroprudential frameworks have rightly become an essential pillar of financial stability policies. This presentation addresses the implications of the financial cycle for their design, including objectives, instruments and governance.
Abstract
Post-crisis, macroprudential frameworks have rightly become an essential pillar of financial stability policies. This presentation addresses the implications of the financial cycle for their design, including objectives, instruments and governance as well as, more specifically, the strengths and limitations of macro-stress tests and network analysis. It highlights the areas where the scope for further work is greatest, including international co-ordination, the role of non-banks and sovereign risk. Addressing financial stability is a task that requires the active support of other policies, including monetary and fiscal policy. Macroprudential frameworks must be part of the answer, but cannot be the whole answer.
The views expressed here are my own and not necessarily those of the BIS or its member institutions.
