Macroprudential frameworks: experience, prospects and a way forward

Speech by Mr Claudio Borio, Head of the Monetary and Economic Department of the BIS, on the occasion of the Bank's Annual General Meeting, Basel, 24 June 2018.

Macroprudential frameworks have become a key new element of the post-crisis financial reforms designed to ensure financial stability. The major intellectual shift in the conception of risk they have brought about is extremely welcome and probably the most enduring gain. Much progress has been made in their implementation but more needs to be done: to better identify risks and calibrate the tools; to develop tools that target the non-bank sector; and to implement mechanisms to address cross-country leakages. While the measures have strengthened the financial system's resilience, as used so far they have not necessarily prevented the build-up of financial imbalances. Macroprudential measures need to be embedded in a broader macro-financial stability framework that includes, in addition to strong microprudentially oriented regulation and supervision, also monetary, fiscal and even structural policies.