Alexandre Lamfalussy and the origins of the BIS macro-prudential approach to financial stability

Ivo Maes ()
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Ivo Maes: National Bank of Belgium, Robert Triffin Chair, Universite catholique de Louvain, HUBrussel and ICHEC Brussels Management School

PSL Quarterly Review, 2010, vol. 63, issue 254, 265-292

Abstract: Among the international policy institutions, the Bank for International Settlements (BIS) is known for its sensitivity to financial stability issues. Typical for the BIS is a �macro-prudential� approach. In this paper, it is argued that Alexandre Lamfalussy, who was at the BIS from 1976 to 1993, played a crucial role in shaping the BIS approach. Typical for Lamfalussy are a broad macroeconomic view and a focus on the systemically important institutions. In Lamfalussy�s view, there is thus very much an overlap between the micro- and macro-prudential dimensions of financial stability. The main reasons for his sensitivity to financial fragility were: a �Keynesian� Weltanschauung (that a market economy is not sufficiently self-correcting), the emphasis of Dupriez (his teacher) on cycles, Lamfalussy�s experience as a commercial banker, BIS involvement in financial stability issues, especially the Latin American debt crisis of 1982-83 and research on financial innovations.

Keywords: supervision; banking sector; Bank for International Settlements; Lamfalussy (search for similar items in EconPapers)
JEL-codes: A11 B22 B32 E3 F02 G10 N10 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (4)

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