BIS General Manager on financial stability at Reserve Bank of Australia Symposium’s 50th Anniversary
10 February 2010
Jaime Caruana’s speech posed ten questions about, inter alia, the stability of markets, sufficiency of private risk control and capital requirements, policies towards systemic risk, their relationship to monetary policy and international cooperation.
The speech posed questions about, inter alia, the stability of markets, sufficiency of private risk control and capital requirements, policies towards systemic risk, their relationship to monetary policy and international cooperation.
Three points were made. First, financial stability requires not only that bank regulation be improved at the micro level but also that, at the macro-prudential level, margins of safety are built up in good times and that large and connected firms internalize their contribution to systemic risk. Second, financial stability requires that macro-economic policies, including monetary policy, play a role. Finally, international cooperation is vital to maintain financial stability.
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