The Changing Role of Macroprudential Policy in Austria after World War II

Döme, S., S. W. Schmitz, K. Steiner, E. Ubl (2016) "The Changing Role of Macroprudential Policy in Austria after World War II", Two Hundred Years of Central Banking in Austria: selected topics. Monetary Policy and the Economy Q3-4/16, 163-189

27 Pages Posted: 16 May 2017

See all articles by Sophia Döme

Sophia Döme

Oesterreichische Nationalbank (OeNB)

Stefan W. Schmitz

Oesterreichische Nationalbank (OeNB); Vienna Circle Society

Katharina Steiner

Oesterreichsiche Nationalbank (OeNB)

Eva Ubl

Oesterreichische Nationalbank (OeNB)

Date Written: September 5, 2016

Abstract

The need for and implementation of macroprudential supervision was a key lesson from the global financial crisis of 2008. However, historical protocols, legislation, policy agreements as well as the literature bear witness of a longer history of macroprudential policy in Austria: it predates the crisis by about 60 years during which it gradually evolved. We argue that careful analysis of this history provides interesting insights for current policymakers. We identify the following key lessons from analyzing the changing legal nature, motivation and effectiveness of macroprudential policy in Austria: first, macroprudential policy requires a sound legal basis; second, measures have to be quite intrusive to effectively curtail the build-up of systemic risk. Less intrusive measures become effective above all by increasing the shock-absorbing capacity of the financial system, once sytemic risks materialize.

Keywords: History of Austrian macroprudential policy, credit control agreements

JEL Classification: E50, E60, G20, N24

Suggested Citation

Döme, Sophia and Schmitz, Stefan W. and Steiner, Katharina and Ubl, Eva, The Changing Role of Macroprudential Policy in Austria after World War II (September 5, 2016). Döme, S., S. W. Schmitz, K. Steiner, E. Ubl (2016) "The Changing Role of Macroprudential Policy in Austria after World War II", Two Hundred Years of Central Banking in Austria: selected topics. Monetary Policy and the Economy Q3-4/16, 163-189, Available at SSRN: https://ssrn.com/abstract=2968882

Sophia Döme

Oesterreichische Nationalbank (OeNB) ( email )

Otto-Wagner-Platz 3, PO Box 61
Vienna,
1010 Vienna, A-1011
Austria

Stefan W. Schmitz (Contact Author)

Oesterreichische Nationalbank (OeNB) ( email )

Otto-Wagner Platz 3
POB 61
Vienna 1011
Austria

Vienna Circle Society ( email )

Spitalgasse 2-4, Court 1
Vienna, 1090
Austria

Katharina Steiner

Oesterreichsiche Nationalbank (OeNB) ( email )

Otto-Wagner-Platz 3, PO Box 61
Vienna, A-1011
Austria

Eva Ubl

Oesterreichische Nationalbank (OeNB) ( email )

Otto-Wagner-Platz 3, PO Box 61
Vienna,
1010 Vienna, A-1011
Austria

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