Macroprudential policy - Addressing the things we don't know

In a co-authored paper published jointly today by the Group of 30 and the Bank of England, Alastair Clark and Sir Andrew Large identify and discuss some of the more difficult and contentious issues relating to macroprudential policy.
Published on 16 September 2011

While the recent emphasis on macroprudential policy reflects the inadequacies of traditional approaches to macroeconomic policy and financial regulation revealed by the financial crisis, the paper points out that there is as yet no clear consensus on the scope or precise targets of macroprudential policy. The paper identifies, however, two key elements: monitoring, analysing and seeking to mitigate emerging “conjunctural” risks (e.g., an excessive build-up of leverage or debt); and enhancing the resilience of the financial system in the face of these risks.

PDFPress release


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