Supervisory frameworks and monetary policy

Esther L. George

Journal of Economic Dynamics and Control, 2014, vol. 49, issue C, 139-141

Abstract: One issue that the crisis has pushed to the forefront is the relationship between macroeconomics and finance, and how we think about the footings of financial stability. My comments this evening will focus briefly on this intersection of monetary policy and supervisory and regulatory issues. I am convinced that promoting financial stability requires a comprehensive approach that uses both macroprudential tools and the examination of individual firms, relying on the judgment of experienced examiners. In addition, I am skeptical of a clean “separation principle” that places financial stability squarely in the purview of the supervisors. Instead, I think monetary policymakers also need to maintain a careful eye on the financial system and how interest rate policy affects incentives for financial markets and institutions.

Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:49:y:2014:i:c:p:139-141

DOI: 10.1016/j.jedc.2014.09.035

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