Angelini, Paolo, Neri, Stefano & Panetta, Fabio.
The global financial crisis has prompted an intense debate on the role of macroprudential policies in limiting the accumulation of risks and imbalances. Major economies have recently established new institutions, or strengthened existing ones, with a mandate to pursue financial stability. This column examines the effectiveness and consequences of macroprudential policies with a focus on their interaction with monetary policy.
The recent debate on macroprudential policies moves from the idea that a regulatory gap – the fact that no authority was explicitly in charge of controlling systemic risk – has played an important role in the financial crisis. Indeed, microprudential supervisors typically focus on individual institutions, and therefore are liable to neglect risks outside their purview, such as those that can be negligible at the individual institution level but may add up in the aggregate. Central banks concentrate on the primary goal of price stability, and may not be sufficiently concerned about financial stability. Furthermore, various sectors of the financial system often fall under the responsibility of different authorities, making it difficult to conduct a thorough analysis of systemic risk, let alone act upon it.
Πηγή: Voxeu