## _031411a

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---

### Survey scope and high-level findings
- Survey sent to 63 countries and the European Central Bank (ECB), including all countries in the G-20 and those subject to mandatory Financial Sector Assessment Programs (FSAPs).
- Response rate: 80 percent.
- Macroprudential policy is becoming an overarching public policy; it involves the authority, and uses the tools, of prudential, monetary, fiscal and competition policies.
- The perimeter of macroprudential policy is expansive but not clearly defined; interactions between macroprudential policy and other public policies are not well understood.

### Financial stability: mandates, definitions, and institutional roles
- Formal mandate for financial stability: 88% of respondents.
- Institutional assignment:
  - In most countries (82 percent), the central bank is either the sole institution with the financial stability mandate, or shares the mandate with one or more other agencies.
  - Central Bank counts/ratios reported in source tables (e.g., Central Bank: 41 91.1 ...).
- Definitions of financial stability provided by 73 percent of respondents; of these definitions, 81 percent are informal.
- Common features of definitions:
  - What needs to be stable: institutions, markets, infrastructure.
  - What a stable system achieves: risk allocation, diversification, management (59.5%); intermediation between savers and borrowers (45.9%); payment, settlement, clearing, trading (43.2%).
  - Characteristics: resilient, robust, sound, able to withstand shocks and unraveling imbalances (62.2%); efficient, effective (64.9%); smooth, continuous, low volatility, sustainable (45.9%).
  - Objectives cited: macroeconomic stability (10.8%); growth, development (16.2%).

### Macroprudential policy mandates and institutional setup
- Formal macroprudential mandate established in 43 percent of respondents.
- By economy type: emerging market economies 50 percent; advanced economies 35 percent.
- Of those without a current mandate, 52 percent have plans or are considering plans for such a mandate.
- Central bank role: central bank is given the mandate or shares it with other agencies in most countries (Figure 1.2 in source).
- Formal definition of macroprudential policy: no respondent has a formal definition; 59 percent offer an operational definition; four euro-area jurisdictions will use the European Systemic Risk Board definition.
- Operational common elements: role to limit, mitigate or reduce systemic risk; focus more on size, interconnectedness, systemically important institutions or markets than on procyclicality; no mention of crisis management as a macroprudential function.

### Perimeter of responsibilities and toolkit composition
- Range of responsibilities: risk identification; systemic impact assessment; decision making; policy implementation—responsibilities usually shared among several public agencies.
- Decision-making responsibility by institution:
  - Central bank: decision-making responsibility in 86 percent of countries.
  - Financial stability committee: 41 percent.
  - Ministry of Finance: 23 percent.
- Toolkit categories (Table 1.3): Prudential (e.g., capital and loan-to-value ratios); Monetary (e.g., interest rate or direct instruments); Fiscal (e.g., tax policies); Capital controls; Exchange rate policy; Antitrust/competition policy; Other instruments.
- Many instruments have been used historically but calibrated more frequently since the global crisis.
- Jurisdictions prefer instruments that are simple, effective, easy to implement, limited cost to financial institutions, and minimize market distortions.
- Noted challenges:
  - Regulatory arbitrage across borders and across segments of the financial system.
  - Countercyclical capital buffer susceptible to regulatory arbitrage.
  - Large capital inflows caused by quantitative easing in advanced economies pose challenges for many emerging market economies.

### Coordination arrangements, dispute resolution, and communication
- Mandate sharing: majority of respondents (59 percent) share the macroprudential mandate between the central bank and at least one other public agency.
- Number of agencies sharing the mandate: up to five in some countries, complicating coordination and timely action.
- Coordination mechanisms:
  - Some countries have a lead coordinating agency; others do not.
  - Where no lead coordinator, coordination sometimes set out in a memorandum of understanding, often informal.
  - Macroprudential policy frequently based on consensus; disagreements usually resolved through discussion and negotiation.
  - Resolution methods used: majority vote (6 percent) or executive decision (10 percent) only in a few countries.
- Financial stability committees:
  - 44 percent of respondents have a financial stability committee.
  - Typical mandates: coordination and information exchange; monitoring and assessing systemic risks; discussing proposals and making recommendations; supervising systemically important institutions.
  - Most committees play an advisory role; executive decision power only in Belgium, Indonesia, Japan, South Africa, and Thailand.
  - Committee chairs: Ministry of Finance 54 percent; central bank 23 percent; shared by two or more institutions 18 percent; Prime Minister 5 percent.
- Public communications:
  - Financial Stability Report published by 84 percent.
  - Two-thirds publish reports to the executive or parliament.
  - Minutes of policy meetings used by 16 percent; public announcements by 14 percent.
  - About one-third issue risk warnings to the public.

### Leading indicators and monitoring practices
- Views on leading indicators diverge; no single indicator cited by more than a third of respondents as a leading indicator.
- Most frequently cited indicators:
  - Credit growth or the credit-to-GDP ratio: 25 percent.
  - Ratio of banks’ non-performing loans to total loans: 18 percent.
  - Changes in property or asset prices: 16 percent.
- Usage notes: only a few respondents use leading indicators operationally for macroprudential decisions; some leading indicators have limited predictive power.
- Table 2.1 reported monitoring ratios (as presented):
  - Banks’ nonperforming loans to total loans: 80.487.075.0 (as reported).
  - Liquid assets to short-term liabilities: 78.473.982.1.
  - Capital to assets (leverage): 66.773.960.7.
  - Net open position in foreign exchange to capital: 54.926.178.6.
  - Real estate price index change: 52.952.253.6.
  - Net private capital inflows (% of GDP): 43.130.453.6.

### Quantitative models, usage, and influence
- Use of quantitative models/tools: 88 percent of respondents indicate use for systemic risk identification and assessment.
  - All advanced economies reported use; 79 percent of emerging market economies reported use.
- Purposes reported:
  - Identifying buildup of systemic risk: 80 percent.
  - Assessing impact of systemic risk: 75 percent.
  - Assessing resilience of the financial system: 76 percent.
- Types of models/tools mentioned: Early warning models (e.g., Kaminsky and Reinhart); Asset price/real estate valuation models; Single-institution risk models (Merton-type, distance-to-default, VaR); Systemic financial sector risk models (systemic CCA, CoVaR, distress dependence); Contagion risk models (Extreme Value Theory-based, network models); Macro-financial linkages models (sovereign CCA, rating agency Z-score models); Stress testing (widely used).
- Table 2.2 utilization (as reported):
  - Early warning models: 35.326.142.9.
  - Asset price/real estate valuation models: 41.256.528.6.
  - Single-institution models: 54.973.939.3.
  - Systematic financial sector risk models: 33.352.217.9.
  - Contagion risk models: 39.239.139.3.
  - Macro-financial linkage models: 35.343.528.6.
  - Stress test: 39.243.535.7.
- Perceived influence on policy decisions:
  - To a large extent: 2%.
  - To some extent: 77%.
  - Little direct influence: 21%.
  - No influence at all: 0%.
- Limitations: data availability is a major constraint; for some emerging markets, lack of model-building skills is also a constraint; many view models as useful but limited in direct policy influence.

### Qualitative methods and forward-looking assessment
- Qualitative methods supplement quantitative assessment and inform forward-looking judgment:
  - Active engagement with market participants: 84 percent.
  - Reviewing financial institutions’ strategy and business plans: 80 percent.
  - Analyzing trends and complexity in new products or structure of financial institutions: 78 percent.
  - Active engagement with other stakeholders (e.g., auditors): 45 percent.
  - Bank surveys (e.g., loan survey): 14 percent.
  - Market intelligence: 10 percent.
- Counts/ratios from source tables for qualitative methods (examples):
  - Reviewing financial institutions' strategies and business plans: 41 80.4.
  - Active engagement with market participants: 43 84.3.
  - Analyzing trends and complexity in new products: 40 78.4.

### Macroprudential toolkit scope, adoption, and objectives
- Total instruments cited as potentially useful: 34.
- Belief in policy combinations: 86 percent of respondents believe policymakers can choose combinations of tools to achieve macroprudential objectives.
  - By region: emerging market economy respondents 96 percent; advanced economy respondents 74 percent.
- Instruments used in practice:
  - 73 percent indicate a total of 30 instruments have been used.
  - Breakdown of those 30 instruments: prudential tools 16; foreign exchange measures 6; monetary policy instruments 5; fiscal measures 2.
  - Increasing government-owned land sales to boost land supply cited as an instrument to prevent asset price bubbles.
- Most widely used instruments and counts:
  - Caps on the loan-to-value (LTV) ratio: used by 22 countries.
  - Limits on net open currency positions: used by 15 countries.
  - Caps on the debt-to-income ratio: widely used (country count not restated in excerpt).
  - 18 countries have restrictions on LTV; another four use LTV-dependent risk weights.
- Timing since the global crisis:
  - More than 70 percent of respondents using the LTV have started using or adjusted it since 2008.
  - 60 percent using caps on the debt/loan-to-income ratio have started using or adjusted it since 2008.
  - All countries that have imposed restrictions on profit distribution (8) and sector-specific taxes (3) have started using them since 2008.
- Frequency by economy type: tools used more frequently by emerging market economies 89 percent than by advanced economies 52 percent.
- Instrument use objectives (distribution of reported instances):
  - Credit growth: 39 percent.
  - Currency risk: 23 percent.
  - Leverage: 15 percent.
  - Cyclicality: 13 percent.
  - Size, complexity and interconnectedness: 6 percent.
  - Capital flows: 4 percent.
- Overlap: instruments often used for multiple objectives (e.g., caps on foreign currency lending used for foreign currency risk and sometimes to limit credit growth; caps on LTV used to limit credit growth and sometimes to address leverage).

### Calibration, evaluation, and standards
- Calibration approaches:
  - Learning by doing: 72 percent.
  - Drawing on cross-country experiences: 58 percent.
  - Using models: 44 percent.
  - Other references: some respondents use international standards (e.g., Basel III) or expert judgment.
- Evaluation of effectiveness:
  - Views vary; respondents cite difficulties in evaluating instrument effectiveness.
  - Majority agree effectiveness should be measured against ability to reduce cyclicality/volatility.
  - Indicators mentioned: credit growth, asset prices, capital flows, current account.
  - Some prefer quantitative impact assessment models; others prefer qualitative assessments including market feedback, behavioral changes, and potential regulatory arbitrage.
  - Some evaluate against historical trends or international benchmarks; others emphasize country-specific circumstances.

### Cross-border issues, regulatory arbitrage, and tradeoffs
- Cross-border banking challenges:
  - Lack of synchronization in economic cycles and spillovers across jurisdictions complicate macroprudential policy.
  - Countercyclical capital buffer considered susceptible to regulatory arbitrage without harmonization.
  - For many emerging market economies, large capital inflows driven by quantitative easing in advanced economies are a challenge.
  - Cross-border coordination and cooperation are deemed essential; regional platforms cited.
  - A few emerging market respondents prefer requiring foreign-owned financial institutions to incorporate locally rather than operate as branches.
- Regulatory arbitrage opportunities cited:
  - Unregulated institutions (hedge funds, private equity funds, other shadow banks, nonfinancial corporations).
  - Unregulated products (OTC derivatives, cross-border lending).
  - Many respondents favor extending the regulatory perimeter to nonbank financial institutions.
  - Recommendations: enhance information exchange and coordination; fill important data gaps (including collecting data on nonfinancial corporations).
- Tradeoffs between policy objectives:
  - 62 percent of respondents believe there are tradeoffs between macroprudential and other public policies (microprudential, monetary, fiscal).
  - 34 percent cite instances of such tradeoffs.
  - Some respondents report no tradeoffs experienced.
  - Views include that tradeoffs can be minimized by careful instrument selection or by having the same authority implement multiple policies.

### Reporting, data, and committee practices (selected table figures preserved)
- Reporting practices (Table 3 excerpted figures as presented):
  - Report to executive or parliament: Public 77 1, Non-public 27 70.
  - Financial stability report: Public 12 0, Non-public 42 30.
  - Minutes of meetings: Public 26 0, Non-public 61 81.
  - Risk-warnings: Public 59 1, Non-public 9 13 1.
  - Speech/press conference: Public 60 0, Non-public 10 0.
- Monitoring systemic risk — top regularly monitored indicators (Table 4 top items and percentages preserved):
  - Credit risk — Banks’ nonperforming loans to total loans: 41 80.4.
  - Systemic liquidity risk — Liquid assets to short-term liabilities: 40 78.4.
  - Leverage — Capital to assets (leverage): 34 66.7.
  - Foreign currency exposure risk — Net open position in foreign exchange to capital: 28 54.9.
  - Asset price risk — Real estate price index change: 27 52.9.
  - Capital flows — Net private capital inflows (% of GDP): 22 43.1.
- Quantitative models’ reported influence on policy decisions (counts/ratios as presented):
  - To a large extent: 12 3.1.
  - To some extent: 33 76.7.
  - Little direct influence: 9 20.9.
  - No influence at all: 0 0.0.

### Part 3 — Instruments listed for the macroprudential toolkit (presentation of instrument groupings)
- Size, complexity, and interconnectedness instruments:
  - Capital surcharges for systemically important institutions.
  - Limits on interbank exposure.
  - Size-dependent leverage limits.
  - Size-dependent asset risk weights.
- Procyclicality instruments:
  - Countercyclical/time-varying capital requirements.
  - Countercyclical/dynamic provisioning.
  - Restrictions on profit distribution.
  - Countercyclical/time-varying liquidity coverage ratios.
- Credit growth and asset price instruments:
  - Caps on loan-to-value ratios.
  - Caps on debt-to-income ratios.
  - Sector-dependent asset risk weights.
  - Interest rate policy.
  - Ceilings on credit or credit growth.
  - Sector-specific taxes.
  - Caps on loan-to-deposit ratios.
  - Reserve requirements.
  - Limit on exposure concentration.
  - Value and maturity dependent risk measures.
  - Moral suasion.
  - Land supply (e.g., increasing government-owned land sales to boost land supply).
- Leverage and maturity mismatch instruments:
  - Limits on maturity mismatch.
  - Minimum haircuts/margins on collateral.
  - Core funding ratios.
  - Limits on exposure by instrument (e.g., CDS).
  - Limits on off-balance sheet positions (e.g., derivatives).
- Currency risk instruments:
  - Limits on net open currency positions.
  - Limits on currency mismatch.
  - Caps on foreign currency lending.
  - Foreign exchange policy measures (e.g., restrictions on foreign currency holdings).
  - Differentiated reserve requirements for foreign currency.
- Capital flow measures:
  - Unremunerated reserve requirements for non-residents.
  - Tax on capital flows.
  - Minimum holding periods for capital inflows.

*Prepared by a team led by Cheng Hoon Lim, comprising Rina Bhattacharya, Francesco Columba, Alejo Costa, Akira Otani, and Xiaoyang Wu.*

### Part 1. Institutional Arrangements .....................................................................................

### Part 1. Institutional Arrangements

### Survey scope and high-level findings
- The survey was sent to 63 countries and the European Central Bank (ECB), including all countries in the G-20 and those subject to mandatory Financial Sector Assessment Programs (FSAPs).
- The response rate is 80 percent.
- Macroprudential policy is becoming an overarching public policy; it involves the authority, and uses the tools, of prudential, monetary, fiscal and competition policies.
- The perimeter of macroprudential policy is expansive but not clearly defined; interactions between macroprudential policy and other public policies are not well understood.

### Financial stability: mandates, definitions, and roles
- 88% of respondents has a formal mandate for financial stability.
- In most countries (82 percent), the central bank is either the sole institution with the financial stability mandate, or shares the mandate with one or more other agencies.
- Definitions of financial stability are provided by 73 percent of respondents; of these definitions, 81 percent are informal.
- Common features of respondents’ definitions (Table 1.1):
  - What needs to be stable: institutions, markets, infrastructure.
  - What a stable system achieves: risk allocation, diversification, management (59.5%); intermediation between savers and borrowers (45.9%); payment, settlement, clearing, trading (43.2%).
  - Characteristics of a stable system: resilient, robust, sound, able to withstand shocks and unraveling imbalances (62.2%); efficient, effective (64.9%); smooth, continuous, low volatility, sustainable (45.9%).
  - Objectives cited include macroeconomic stability (10.8%) and growth, development (16.2%).

### Macroprudential policy: mandates and institutional setup
- A formal mandate for macroprudential policy has been established in 43 percent of the respondents.
- A larger proportion of emerging market economies (50 percent) than advanced economies (35 percent) has a macroprudential mandate.
- Of those without a current mandate, 52 percent have plans or are considering plans for such a mandate.
- The central bank plays a key role in the macroprudential policy framework—it is given the mandate or shares it with other agencies in most countries (Figure 1.2).
- Macroprudential policy is not formally defined; no respondent has a formal definition, though 59 percent offer an operational definition. Four euro-area jurisdictions indicate they will use the definition established by the European Systemic Risk Board.
- Operationally common elements (Table 1.2): role to limit, mitigate or reduce systemic risk; focus on size, interconnectedness, systemically important institutions or markets more often than procyclicality; no mention of crisis management as a macroprudential function.

### Perimeter of responsibilities and toolkit
- According to respondents, macroprudential responsibilities range from risk identification and systemic impact assessment to decision making and policy implementation; responsibilities are usually shared among several public agencies.
- The central bank has decision-making responsibility in 86 percent of countries, followed by the financial stability committee (41 percent) and the Ministry of Finance (23 percent).
- Table 1.3 (Perimeter of Macroprudential Policy Toolkit) indicates the toolkit spans:
  - Prudential (e.g., capital and loan-to-value ratios)
  - Monetary (e.g., interest rate or direct instruments)
  - Fiscal (e.g., tax policies)
  - Capital controls
  - Exchange rate policy
  - Antitrust/competition policy
  - Other instruments
- Many instruments have been used for a long time but have been calibrated more frequently since the global crisis.
- Most jurisdictions strive to choose instruments that are simple, effective and easy to implement with limited cost to financial institutions and minimal market distortions.
- Challenges noted:
  - Regulatory arbitrage across borders and across segments of the financial system.
  - Countercyclical capital buffer considered susceptible to regulatory arbitrage.
  - Large capital inflows caused by quantitative easing in advanced economies pose challenges for many emerging market economies.

### Coordination arrangements and communication
- In a majority of respondents (59 percent), the macroprudential policy mandate is shared between the central bank and at least one other public agency.
- The number of agencies sharing the mandate can be up to five in some countries, complicating policy coordination and timely action.
- Coordination mechanisms:
  - Some countries have a lead coordinating agency; others do not.
  - Where there is no lead coordinator, coordination is sometimes set out in a memorandum of understanding, though often the process is informal.
  - Macroprudential policy is frequently based on consensus; policy disagreements are usually resolved through discussion and negotiation.
  - Resolution methods for disagreements: majority vote (6 percent) or executive decision (10 percent) in only a few countries.
- Financial stability committees:
  - 44 percent of respondents have established a financial stability committee.
  - Typical mandates: coordination and information exchange, monitoring and assessing systemic risks, discussing proposals and making recommendations, supervising systemically important institutions.
  - In most countries the committee plays an advisory role; the committee has power to take executive decisions in only a few jurisdictions (Belgium, Indonesia, Japan, South Africa, and Thailand).
  - Committee chairs: Ministry of Finance (54 percent), central bank (23 percent), shared by two or more institutions (18 percent), Prime Minister (5 percent).
- Public communications:
  - 84 percent publish a Financial Stability Report.
  - Two-thirds publish reports to the executive or parliament.
  - Minutes of policy meetings are used by 16 percent; public announcements by 14 percent.
  - About one-third of respondents issue risk warnings to the public.

*Prepared by a team led by Cheng Hoon Lim, comprising Rina Bhattacharya, Francesco Columba, Alejo Costa, Akira Otani, and Xiaoyang Wu.*

### 15. Views on leading indicators diverge. Although a number of indicators are

### 15. Views on leading indicators diverge. Although a number of indicators are

### Leading indicators cited
- No single indicator is cited by more than a third of respondents as a leading indicator.
- Most frequently cited indicators:
  - Credit growth or the credit-to-GDP ratio: 25 percent
  - Ratio of banks’ non-performing loans to total loans: 18 percent
  - Changes in property or asset prices: 16 percent
- Usage notes:
  - Only a few respondents indicate leading indicators are used operationally as the basis for macroprudential decisions.
  - Some respondents caution that while some leading indicators provide information on the probability of future stress, they lack predictive power.

### Table 2.1: Financial Indicators to Monitor Risks (as reported)
- Credit risk
  - Indicator: Banks’ nonperforming loans to total loans
  - Ratio (%): 80.487.075.0
- Systemic liquidity risk
  - Indicator: Liquid assets to short-term liabilities
  - Ratio (%): 78.473.982.1
- Excessive leverage risk
  - Indicator: Capital to assets (leverage)
  - Ratio (%): 66.773.960.7
- Foreign currency exposure risk
  - Indicator: Net open position in foreign exchange to capital
  - Ratio (%): 54.926.178.6
- Asset price risk
  - Indicator: Real estate price index change
  - Ratio (%): 52.952.253.6
- Capital flows reversal risk
  - Indicator: Net private capital inflows (% of GDP)
  - Ratio (%): 43.130.453.6

### Use of quantitative models and tools
- Prevalence and purposes:
  - 88 percent of respondents indicate they use quantitative models/tools for systemic risk identification and assessment.
  - All advanced economies reported use; 79 percent of emerging market economies reported use.
  - Purposes:
    - Identifying buildup of systemic risk: 80 percent
    - Assessing impact of systemic risk: 75 percent
    - Assessing resilience of the financial system: 76 percent
- Types of models/tools mentioned:
  - Early warning models (e.g., Kaminsky and Reinhart)
  - Asset price/real estate valuation models (fundamental analysis models)
  - Single-institution risk models (Merton-type, distance-to-default, VaR)
  - Systemic financial sector risk models (systemic CCA, CoVaR, distress dependence)
  - Contagion risk models (Extreme Value Theory-based, network models)
  - Macro-financial linkages models (sovereign CCA, rating agency Z-score models)
  - Stress testing (widely used)

### Table 2.2: Utilization of Quantitative models/tools (as reported)
- Early warning models: 35.326.142.9
- Asset price/real estate valuation models: 41.256.528.6
- Single-institution models: 54.973.939.3
- Systematic financial sector risk models: 33.352.217.9
- Contagion risk models: 39.239.139.3
- Macro-financial linkage models: 35.343.528.6
- Stress test: 39.243.535.7

### Influence and limits of quantitative models
- Perceived influence on policy decisions:
  - To a large extent: 2%
  - To some extent: 77%
  - Little direct influence: 21%
  - No influence at all: 0%
- Limitations cited:
  - Data availability is a major constraint.
  - For some emerging markets, lack of model-building skills is also a constraint.
  - Many respondents view models as useful but limited in direct policy influence.

### Role of qualitative methods
- Qualitative methods used to supplement quantitative assessment and for forward-looking judgment:
  - Active engagement with market participants: 84 percent
  - Reviewing financial institutions’ strategy and business plans: 80 percent
  - Analyzing trends and complexity in new products or structure of financial institutions: 78 percent
  - Active engagement with other stakeholders (e.g., auditors): 45 percent
  - Bank surveys (e.g., loan survey): 14 percent
  - Market intelligence: 10 percent

### Macroprudential toolkit: scope and usage
- Toolkit composition and beliefs:
  - Total instruments cited as potentially useful: 34
  - 86 percent of respondents believe policymakers can choose combinations of tools to achieve macroprudential objectives.
  - By region: 96 percent of emerging market economy respondents believe so; 74 percent of advanced economy respondents believe so.
- Instruments used in practice:
  - 73 percent of respondents indicate a total of 30 instruments have been used.
  - Breakdown of those 30 instruments: prudential tools (16), foreign exchange measures (6), monetary policy instruments (5), fiscal measures (2).
  - Increasing government-owned land sales to boost land supply is cited as an instrument to prevent asset price bubbles.
- Most widely used instruments and counts:
  - Caps on the loan-to-value (LTV) ratio: used by 22 countries
  - Limits on net open currency positions: used by 15 countries
  - Caps on the debt-to-income ratio: widely used (specific country count not restated here)
  - Other statistics:
    - 18 countries have restrictions on LTV; another four use LTV-dependent risk weights.
- Timing of adoption/adjustment since the global crisis:
  - More than 70 percent of respondents using the LTV have started using or adjusted it since 2008.
  - 60 percent using caps on the debt/loan-to-income ratio have started using or adjusted it since 2008.
  - All countries that have imposed restrictions on profit distribution (8) and sector-specific taxes (3) have started using them since 2008.
- Frequency by economy type:
  - Tools are used more frequently by emerging market economies (89 percent) than by advanced economies (52 percent).

### Objectives and overlap of instruments
- Six objective categories for instrument use:
  - Size, complexity and interconnectedness
  - Cyclicality
  - Leverage
  - Credit growth and asset prices
  - Capital flows
  - Foreign currency risk
- Distribution of reported instances of instrument use by objective:
  - Credit growth: 39 percent
  - Currency risk: 23 percent
  - Leverage: 15 percent
  - Cyclicality: 13 percent
  - Size, complexity and interconnectedness: 6 percent
  - Capital flows: 4 percent
- Overlaps:
  - Instruments are often used for multiple objectives (e.g., caps on foreign currency lending used to address foreign currency risk and sometimes to limit credit growth; caps on LTV used to limit credit growth and sometimes to address leverage).

### Calibration, evaluation, and standards
- Calibration approaches:
  - Learning by doing: 72 percent
  - Drawing on cross-country experiences: 58 percent
  - Using models: 44 percent
  - Other references: some respondents use international standards (e.g., Basel III) or expert judgment.
- Evaluation of effectiveness:
  - Views vary; respondents cite difficulties in evaluating instrument effectiveness.
  - Majority agree effectiveness should be measured against ability to reduce cyclicality/volatility.
  - Indicators mentioned for measurement include credit growth, asset prices, capital flows, and the current account.
  - Some prefer quantitative impact assessment models; others prefer qualitative assessments including market feedback, behavioral changes, and potential regulatory arbitrage.
  - Some evaluate against historical trends or international benchmarks; others emphasize country-specific circumstances.

### Cross-border issues, regulatory arbitrage, and tradeoffs
- Cross-border banking challenges:
  - Lack of synchronization in economic cycles and spillovers across jurisdictions complicate macroprudential policy.
  - Countercyclical capital buffer is considered susceptible to regulatory arbitrage if policies are not harmonized.
  - For many emerging market economies, large capital inflows driven by quantitative easing in advanced economies are a challenge.
  - Cross-border coordination and cooperation are deemed essential; regional platforms are cited by respondents.
  - A few emerging market respondents note that requiring foreign-owned financial institutions to incorporate locally addresses cross-border issues better than a “branch” model.
- Regulatory arbitrage concerns:
  - Arbitrage opportunities cited include unregulated institutions (hedge funds, private equity funds, other shadow banks, nonfinancial corporations) and unregulated products (OTC derivatives, cross-border lending).
  - Many respondents favor extending the regulatory perimeter to nonbank financial institutions.
  - Recommendations include enhancing information exchange and coordination and filling important data gaps (including collecting data on nonfinancial corporations).
- Tradeoffs between policy objectives:
  - 62 percent of respondents believe there are tradeoffs between macroprudential and other public policies (microprudential, monetary, fiscal).
  - 34 percent cite instances of such tradeoffs.
  - Some respondents report no tradeoffs experienced.
  - Views include that tradeoffs can be minimized by careful instrument selection or by having the same authority implement multiple policies.

*Source: IMF survey and analysis as presented in the supplied content unit.*

### Part 1

### _031411a - Part 1

### Formal mandate for financial stability
- Question: Does any institution or authority within your jurisdiction have a formal mandate for financial stability?
  - Note: Countries which do not respond to this question are included in “No”.
- Responses (aggregate by count and ratio (%)):
  - Yes: 45 88.2 9 10 22 3 11 6 29 21 24 (as presented in source table)
  - No: 6 11.8 1 20 21 24 24

### How the formal mandate is made explicit
- Legislation: 40 88.9 7 9 12 21 12 28 19 21 (as presented)
- Decision of the Executive: 3 6.7 1 20 00 21 21
- Memorandum of understanding: 0 0.0 0 00 00 00
- Exchange of letters: 2 4.4 0 11 00 11 11
- Other: 3 6.7 1 10 10 12 21

### Institutions given the financial stability mandate (counts and ratios as in source)
- Central Bank: 41 91.1 7 9 22 21 14 27 19 22
- Integrated financial regulator/supervisor: 11 24.4 2 20 70 47 83
- Banking regulator/supervisor: 7 15.6 1 20 40 34 52
- Insurance regulator/supervisor: 4 8.9 0 20 20 13 31
- Securities regulator/supervisor: 2 4.4 0 10 10 02 11
- Ministry of Finance: 10 22.2 2 20 60 28 55
- Deposit insurance agency: 5 11.1 2 20 10 23 32
- Financial stability council/committee: 14 31.1 33 08 04 10 77
- Other: 6 13.3 2 10 20 41 32

### Formal mandate for macroprudential policy
- Question: Does any institution or authority within your jurisdiction have a formal mandate for macroprudential policy?
  - Note: Countries which do not respond to this question are included in “No”.
- Responses (counts and ratios as in source):
  - Yes: 1 20.0 0 10 00 10 01
  - No: 2 40.0 1 00 10 02 11
  - Other: 1 20.0 0 10 00 10 01

### If jurisdiction has a formal macroprudential mandate — how explicit and by what instrument
- Yes (detailed): 22 43.1 5 62 81 8 14 8 14
- No: 29 56.9 6 50 17 11 01 91 51 4  (as presented)
- Mandate made explicit in:
  - Legislation: 14 63.6 4 30 61 68 68
  - Decision of the Executive: 2 9.1 0 11 00 11 02
  - Memorandum of Understanding: 1 4.5 0 00 10 01 01
  - Exchange of letters: 2 9.1 0 11 00 11 11
  - Other: 3 13.6 1 10 10 03 12

### Institutions assigned macroprudential mandates (counts and ratios as in source)
- Central Bank: 19 86.4 4 62 61 6 13
- Integrated financial regulator/supervisor: 1 4.5 0 10 00 10 10
- Banking regulator/supervisor: 5 22.7 1 30 10 23 32
- Insurance regulator/supervisor: 3 13.6 0 20 10 12 12
- Securities regulator/supervisor: 1 4.5 0 10 00 10 01
- Ministry of Finance: 5 22.7 1 30 10 32 23
- Deposit insurance agency: 2 9.1 1 10 00 20 20
- Financial stability council/committee: 9 40.9 2 20 50 36 54
- Other: 2 9.1 1 10 00 20 02

### Plans to introduce a formal macroprudential mandate within next three years
- Note: Countries which do not respond to this question are included in “No”.
- Responses (counts and ratios as in source):
  - Yes: 15 51.7 1 20 12 04 11 19 6
  - No: 14 48.3 4 40 05 1 68 68

### Macroprudential responsibilities by institution (actual (A) and planned (P))
- Overview (Total counts as presented in tables):
  - Central Bank: multiple role counts across Risk Identification, Systemic Impact Assessment, Lead/Coordinator, Decision to Take Action, Implementation and Enforcement, Reporting to Executive or Parliament — examples include 47 14 44 28 14 04 36 53 83 in one row and 90 81 20 90 90 80 in another (exact table entries preserved as presented).
  - Integrated Financial Regulator/Supervisor, Banking Regulator/Supervisor, Insurance Regulator/Supervisor, Securities Regulator/Supervisor, Ministry of Finance, Deposit Insurance Agency, Financial Stability Council/Committee: detailed A/P counts provided in source tables by region (WHD, APD, AFR, EUR, MCD, G20, Non-G20, AD, EM). (Refer to the exact numeric breakdowns in the source tables for each responsibility and region.)

### Range of instruments and level of authority for macroprudential authorities
- Instruments available (Total and by region; levels: Advice, Formal recommendation, Decision/Co-decision):
  - Prudential (e.g., capital and loan-to-value ratios): Total AP/AP/AP counts include 182 182 332; regional breakdowns provided (e.g., WHD 182 182 332, APD 40 30 50 in one table).
  - Monetary (e.g., interest rate or direct instruments): Total counts include 60 60 31 0; regionally specified (e.g., EUR 20 20 12 0).
  - Fiscal (e.g., tax policies): Total counts include 2 5 17 19 1; regionally specified.
  - Capital controls: Total counts include 1 00 5 01 11 in one presentation.
  - Exchange rate policy: Total counts include 60 50 2 20 in one presentation.
  - Antitrust/competition policy: Total counts include 6 12 020 in one presentation.
  - Other: various counts per region (e.g., 30 10 60).
- Level of authority for each instrument is presented in detail by region in the source (Advice / Formal recommendation / Decision/Co-decision counts per instrument and per region).

### Macroprudential policy coordination and dispute resolution
- How controversies are resolved (counts and ratios as presented):
  - The Executive decides: 6 14.0 1 10 40 33 24
  - Majority vote: 7 16.3 1 20 40 34 43
  - Discussion and negotiation in committee: 28 65.1 6 81 12 11 17 12 16
  - Other: 2 4.7 1 00 10 02 11

### Reporting practices (Table 3) — whether reporting is public, non-public, or N/A (counts by reporting item)
- Report to executive or parliament: Public 77 1, Non-public 27 70 (as presented)
- Financial stability report: Public 12 0, Non-public 42 30
- Minutes of meetings: Public 26 0, Non-public 61 81
- Risk-warnings: Public 59 1, Non-public 9 13 1
- Rankings of risk-warnings, with severity grading: Public 17 2, Non-public 39 2
- Speech/press conference: Public 60 0, Non-public 10 0
- Report of economic conditions/monetary policy: Public 20 0, Non-public 30 0
- Reporting requirements of institution(s) involved in financial stability and macroprudential oversight: Irregular/Regular counts provided in source tables and detailed by region (WHD, APD, AFR, EUR, MCD, G20, Non-G20, AD, EM).

### Financial stability council/committee roles, powers, and establishment (if present or considered)
- Roles and powers (counts and ratios as presented):
  - Provide advice: 156 0.0 22 011 0510 87 (as in source)
  - Make formal recommendations: 156 0.0 14 181 5 10 78
  - Act as lead coordinator: 135 2.0 32 071 49 76
  - Take executive decisions: 52 0.0 03 020 32 32
  - Other: 41 6.0 01 030 22 13
- Manner of establishment:
  - Legislation: 145 6.0 14 09 0 59 77
  - Decision of the Executive: 62 4.0 23 100 24 15
  - Memorandum of Understanding: 2 8.0 00 02 02 11
  - Exchange of Letters: 0 0.0 00 00 00
  - Other: 3 12.0 01 01 11 12

### Monitoring systemic risk — top indicators regularly monitored (Table 4)
- Risk category: Credit risk
  - Banks’ nonperforming loans to total loans: 41 80.4
  - Credit-to-GDP: 21 41.2
  - Banks’ nonperforming loans net of provisions to capital: 18 35.3
- Systemic liquidity risk
  - Liquid assets to short-term liabilities: 40 78.4
  - Liquid assets to total assets: 32 62.7
  - Funding gap: 21 41.2
- Leverage
  - Capital to assets (leverage): 34 66.7
  - Banks’ regulatory capital to risk-weighted assets: 18 35.3
  - Banks’ regulatory Tier I capital to risk-weighted assets: 17 33.3
- Foreign currency exposure risk
  - Net open position in foreign exchange to capital: 28 54.9
  - Foreign-currency-denominated loans to total loans: 24 47.1
  - Foreign-currency-denominated liabilities to total liabilities: 19 37.3
- Asset price risk
  - Real estate price index change: 27 52.9
  - Asset price index change: 25 49.0
  - Implied stock market volatility: 15 29.4
- Capital flows
  - Net private capital inflows (% of GDP): 22 43.1
  - Gross international reserve to short-term external debt: 11 21.6
  - Gross external debt (% of GDP): 9 17.6
- Question: Have you identified any threshold or range that you use or could potentially use to respond to the excessive build-up of systemic risk?
  - (Respondents were asked to indicate thresholds/ranges where used; specific thresholds not listed in provided excerpt.)

### Quantitative analytical models used to identify systemic risk and assess resilience (Table 5 prompt)
- Jurisdictions were asked to indicate types of quantitative models used for:
  - Identifying build-up of systemic risk (probability and timing, including tail risk)
  - Assessing systemic impact (transmission channels within financial system and to economy)
  - Assessing resilience of the financial system to systemic risk
- Question: Have the quantitative models identified directly influenced policy decisions?
  - Responses (counts and ratios as presented):
    - To a large extent: 12 3.1 0 0 00 01 01
    - To some extent: 33 76.7 6 90 17 11 12 21 61 7
    - Little direct influence: 9 20.9 0 11 70 45 45
    - No influence at all: 0 0.0 0 00 00 00

### Qualitative methods for forward-looking assessment of systemic risks (including tail risks)
- Methods used (counts and ratios as presented):
  - Reviewing financial institutions' strategies and business plans: 41 80.4 6 10 12 31 16 25 21 20
  - Analyzing trends and complexity in new products: 40 78.4 8 91 21 11 15 25 18 22
  - Active engagement with market participants: 43 84.3 8 10 12 31 16 27 21 22
  - Active engagement with other stakeholders (e.g., auditors): 23 45.1 2 81 11 11 01 31 11 12
  - Bank survey (e.g., loan survey): 7 13.7 1 10 50 16 16
  - Market intelligence: 59.8 11 03 0 32 41 (as presented in graphic/text)

*Source: _031411a - Part 1 (source PDF content provided)*

### Part 3

### Part 3

### Survey instructions and purpose
- Respondents are asked to check instruments from Table 6 they believe should be included or are being considered as part of the macroprudential policy toolkit in their jurisdiction.
- Respondents are also asked to indicate in Table 7 the policy instruments they are currently using or have used in the last five years to achieve stated macroprudential objectives.
- The instrument list in Table 6 is not exhaustive; respondents are encouraged to add other appropriate instruments and objectives.
- Respondents are invited to refer back to answers in Q8 when answering these questions.

### Presentation convention in charts
- Charts compare two labels for each instrument: "Potentially useful" and "Actually used".
- The horizontal axis for the charts is labeled "# of countries" with tick marks at: 0, 5, 10, 15, 20, 25, 30, 35, 40, 45.

### Size, complexity, and interconnectedness (instruments listed)
- Capital surcharges for systemically important institutions
- Limits on interbank exposure
- Size-dependent leverage limits
- Size-dependent asset risk weights

### Procyclicality (instruments listed)
- Countercyclical/time-varying capital requirements
- Countercyclical/dynamic provisioning
- Restrictions on profit distribution
- Countercyclical/time-varying liquidity coverage ratios

### Credit growth and asset price (instruments listed)
- Caps on loan-to-value ratios
- Caps on debt-to-income ratios
- Sector-dependent asset risk weights
- Interest rate policy
- Ceilings on credit or credit growth
- Sector-specific taxes (e.g., stamp duty on ...)
- Caps on loan-to-deposit ratios
- Reserve requirements
- Limit on exposure concentration
- Value and maturity dependent risk ...
- Moral suasion
- Land supply

### Leverage and maturity mismatch (instruments listed)
- Limits on maturity mismatch
- Minimum haircuts/margins on collateral
- Core funding ratios
- Limits on exposure by instrument (e.g., CDS)
- Limits on off-balance sheet positions (e.g., derivatives)

### Currency risk (instruments listed)
- Limits on net open currency positions
- Limits on currency mismatch
- Caps on foreign currency lending
- Foreign exchange policy measures (e.g., restrictions on foreign currency holdings)
- Differentiated reserved requirements for foreign currency

### Capital flow measures (instruments listed)
- Unremunerated reserve requirements for non-residents
- Tax of capital flows
- Minimum holding periods for capital inflows

*Source: Part 3, _031411a - Part 3*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2011/_031411a.pdf_