Macroprudential governance: lessons from policies to mitigate housing market risks

Ryan Banerjee and Philip Wooldridge

Chapter 16 in Research Handbook of Macroprudential Policy, 2026, pp 369-383 from Edward Elgar Publishing

Abstract: Governance arrangements have a crucial influence on the effectiveness of macroprudential policy. Experience using macroprudential policies to mitigate housing market risks shows that governance frictions influence the ability of an authority to use the best tool to meet its delegated objective, the speed and flexibility with which it uses its tools, the powers available to it to plug leakages, as well as its ability to call on the microprudential supervisor for assistance with monitoring and enforcement. A single authority with a dedicated macroprudential mandate tends to embody more of the features associated with effective decision-making than other governance arrangements. An unresolved question is whether the participation of government ministries in the process for deciding macroprudential policies would prove more successful in mitigating housing market risks over the long term.

Keywords: Macroprudential policy; Governance; Institutional design; Housing markets (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035306206
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