The nexus of macroprudential supervision, monetary policy, and financial stability

Loretta Mester

Journal of Financial Stability, 2017, vol. 30, issue C, 177-180

Abstract: I discuss changes to bank supervision and regulation since the financial crisis. Microprudential supervision promotes the safety and soundness of individual institutions, while macroprudential supervision focuses on emerging risks to financial system stability. I highlight tools for implementing this macroprudential approach to promoting financial stability, and discuss the interactions and proper relationship between monetary policy and financial stability. While macroprudential tools should be the first line of defense against emerging financial imbalances, in cases where those tools proved to be inadequate to limit risks to financial stability, monetary policy should be considered as a possible defense.

Keywords: Banking supervision and regulation; Financial stability; Monetary policy; Macroprudential supervision (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (19)

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Related works:
Working Paper: The Nexus of Macroprudential Supervision, Monetary Policy, and Financial Stability (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finsta:v:30:y:2017:i:c:p:177-180

DOI: 10.1016/j.jfs.2017.07.003

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