Macroprudential and Microprudential Policies : Toward Cohabitation

Author/Editor:

Jacek Osinski ; Katharine Seal ; Lex Hoogduin

Publication Date:

June 21, 2013

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary:

Effective arrangements for micro and macroprudential policies to further overall financial stability are strongly desirable for all countries, emerging or advanced. Both policies complement each other, but there can also be potential areas of overlap and conflict, which can complicate this cooperation. Organizing their very close interactions can help contain these potential tensions. This note clarifies the essential features of macroprudential and microprudential policies and their interactions, and delineates their borderline. It proposes mechanisms for aligning both policies in the pursuit of financial stability by identifying those elements that are desirable for effective cooperation between them. The note provides general guidance. Actual arrangements will need take into account country-specific circumstances, reflecting the fact that that there is no “one size fits all.”

Series:

Staff Discussion Notes No. 13/5

Subject:

English

Publication Date:

June 21, 2013

ISBN/ISSN:

9781484369999/2221-030X

Stock No:

SDNEA2013005

Format:

Paper

Pages:

28

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