In the hope of edging closer to taming the financial cycle, this presentation puts forward seven suggested "don'ts": don't oversimplify the distinction between micro- and macroprudential policy; don't underestimate the role of capital as the basis for lending; don't set overly ambitious goals for ...
Abstract
In the hope of edging closer to taming the financial cycle, this presentation puts forward seven suggested "don'ts": don't oversimplify the distinction between micro- and macroprudential policy; don't underestimate the role of capital as the basis for lending; don't set overly ambitious goals for macroprudential frameworks during busts; don't regard the length of the financial cycle as a reason to forget monetary policy; don't overlook the impact of the financial cycle on productivity growth; don't think of a financial stability-oriented monetary policy simply as "leaning-against-the wind"; don't presume that even monetary and prudential policies combined can tame the financial cycle.
The views expressed here are my own and not necessarily those of the BIS or its member institutions.
