Principles for Macroprudential Regulation
10 Pages Posted: 1 Jul 2014
Date Written: June 30, 2014
The drafting of macroprudential regulation is largely being driven by the need by policy makers to meet timetables that have been agreed. The legislative drive is taking place without any clear theoretical framework to organise the objectives. In this article we propose two principles that any satisfactory framework ought to respect and then describe one specific model that embodies these principles. We explain the insights from this approach for regulatory design.
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