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Macroprudential Supervision: From Theory to Policy

Dirk Schoenmaker () and Peter Wierts

National Institute Economic Review, 2016, vol. 235, issue 1, R50-R62

Abstract: Financial supervision focuses on the aggregate (macroprudential) in addition to the individual (microprudential). But an agreed framework for measuring and addressing financial imbalances is lacking. We propose a holistic approach for the financial system as a whole, beyond banking. Building on our model of financial amplification, the financial cycle is the key variable for measuring financial imbalances. The cycle can be curbed by leverage restrictions that might vary across countries. We make concrete policy proposals for the design of macroprudential instruments to simplify the current framework and make it more consistent.

Keywords: financial cycle; macroprudential policy; financial supervision; leverage ratio (search for similar items in EconPapers)
JEL-codes: E58 G18 G28 (search for similar items in EconPapers)
Date: 2016
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Related works:
Working Paper: Macroprudential supervision: From theory to policy (2016) Downloads
Working Paper: Macroprudential supervision- from theory to policy (2015) Downloads
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