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Macroprudential and Microprudential Policies: Toward Cohabitation
Author:
Jacek Osinski
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Katharine Seal
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Mr. Lex Hoogduin null

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Series:
Staff Discussion Notes
Volume/Issue:
Volume 2013: Issue 005
Language:
English
Publication Date:
21 Jun 2013
DOI:
https://doi.org/10.5089/9781484369999.006
ISBN:
9781484369999
ISSN:
2617-6750
Pages:
28
Keywords:
SDN; policy action; Policy mandate; policy framework; macroprudential authority; policy debate; policy impasse; macroprudential policy; microprudential policy; supervision; financial stability; financial cycle; capital buffer; authorities' policy action; condition market expectation; risk assessment; central bank; Systemic risk; Countercyclical capital buffers; Financial sector stability
Legal-disclaimer:
Staff Discussion Notes (SDNs) showcase policy-related analysis and research being developed by IMF staff members and are published to elicit comments and to encourage debate.The views expressed in this Policy Discussion Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy.
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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.”
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Cover Staff Discussion Notes
Staff Discussion Notes
ISSN:
2617-6750
Publisher:
International Monetary Fund