The Emergence of Macroprudential Bank Regulation: A Review

Katalin Mérő ()
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Katalin Mérő: Department of Finance, Budapest Business School

Acta Oeconomica, 2017, vol. 67, issue 3, 289-309

Abstract: Although the macroprudential regulation only became a central topic of bank regulation after 2008, recognising and analysing risk, what now we call macroprudential, has formed part of the thinking about banking risk for a long time. A real turn of events was caused by the Global Financial Crisis. Since then, as a consequence of the huge taxpayers’ burden and the mutual reinforcing effect of sovereign and banking crises, the main course of bank regulation has become the elaboration and implementation of regulation with a macroprudential perspective. This article reviews the history of the international evolution of macroprudential regulation from the perspective of both the regulation’s motivations and its conceptual and practical developments. Its main focus is the development of the ideas of a macroprudential perspective on prudential policy and the way these ideas eventually led to concrete experiences with macroprudential regulatory tools. As a conclusion, the author raises the question of whether the financial system has become more stable by implementing the current form of macroprudential regulation.

Keywords: macroprudential; bank regulation; banking crisis; Basel III; European Union; Global Financial Crisis (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2017
Note: The author would like to thank Júlia Király, Judit Neményi and Dóra Piroska for their helpful comments on an earlier version of the paper.
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