Allocating Macro-Prudential Powers
20 Pages Posted: 5 Nov 2020
Date Written: October, 2014
Monetary, macro-prudential and micro-prudential policies are intimately linked. The macroprudential authority should be allocated to the body where the overall balance of synergies (between policy objectives) over conflicts and the required expertise are the largest. This report reviews the pros and cons of the four institutional models for the allocation of macro-prudential powers: (1) the government, (2) the central bank, (3) the financial authority and (4) a committee with representatives from these three bodies.
Keywords: macroprudential regulation, economic policy, governance
JEL Classification: G28
Suggested Citation: Suggested Citation