Experience with macroprudential policy is growing, complemented by an increasing body of empirical research on the effectiveness of macroprudential tools. However, since the experience does not yet span a full financial cycle, the evidence remains tentative. "The wide range of institutional arrangements and policies being adopted across countries suggest that there is no 'one-size-fits-all'. Nonetheless, accumulated experience highlights - and this paper documents - a number of elements that have been found useful for macroprudential policy making," the publication says. These include:
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A clear mandate that forms the basis for assigning responsibility for taking macroprudential policy decisions.
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Adequate institutional foundations for macroprudential policy frameworks. Many of the observed designs give the main mandate to an influential body with a broad view of the entire financial system.
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Well-defined objectives and powers that can foster the ability and willingness to act.
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Transparency and accountability mechanisms to establish legitimacy and create commitment to take action.
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Measures to promote cooperation and information-sharing between domestic authorities.
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A comprehensive framework for analysing and monitoring systemic risk as well as efforts to close information gaps.
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A broad range of policy tools to address systemic risk over time and from across the financial system.
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The ability to calibrate policy responses to risks, including by considering the costs and benefits, addressing any leakages, and evaluating responses. In financially integrated economies, this includes assessing potential cross-border effects.
Press release
Elements of effective macroprudential policies
© BIS - Bank for International Settlements
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