Macroprudential policy: building financial stability institutions - speech by Paul Tucker

Speaking at the 20th Annual Hyman P. Minsky Conference in New York, Paul Tucker - Deputy Governor for Financial Stability, member of the Monetary Policy Committee and member of the interim Financial Policy Committee - discusses the interaction of the UK's new macroprudential regime with domestic arrangements for microprudential supervision, with monetary policy, and with new international arrangements.
Published on 15 April 2011

Paul Tucker begins by emphasising the importance to central banks of having mandates for both monetary and financial stability, given historical lessons from both sides of the Atlantic. He says that the new institutional framework in the UK, with the creation of the Financial Policy Committee (FPC), is ".plugging a gap between microprudential regulation and macroeconomic policy". But he admits that the creation of such a body poses a number of questions, including how financial stability should be defined, what the FPC's objective should be, and what instruments they should control?

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