Macroprudential and Microprudential Policies: Toward Cohabitation
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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. 2013/005
Subject:
Countercyclical capital buffers Financial regulation and supervision Financial sector policy and analysis Financial sector stability Macroprudential policy Microprudential policy Systemic risk
English
Publication Date:
June 21, 2013
ISBN/ISSN:
9781484369999/2617-6750
Stock No:
SDNEA2013005
Pages:
28
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