Towards a Macroprudential Framework for Financial Supervision and Regulation?

26 Pages Posted: 13 Dec 2005  

Claudio E. V. Borio

Bank for International Settlements (BIS) - Research and Policy Analysis

Date Written: February 2003

Abstract

Over the last decade or so, addressing financial instability has risen to the top of the policy agenda. This essay argues that in order to improve the safeguards against financial instability, it may be desirable to strengthen further the macroprudential orientation of current prudential frameworks, a process that is already under way. The essay defines, compares and contrasts the macro- and microprudential dimensions that inevitably coexist in financial regulatory and supervisory arrangements, examines the nature of financial instability against this background and draws conclusions about the broad outline of desirable policy efforts.

Keywords: financial stability, systemic risk, macroprudential, microprudential, financial regulation, financial imbalances

JEL Classification: E44, G10, G20, G28, E30

Suggested Citation

Borio, Claudio E. V., Towards a Macroprudential Framework for Financial Supervision and Regulation? (February 2003). BIS Working Paper No. 128. Available at SSRN: https://ssrn.com/abstract=841306 or http://dx.doi.org/10.2139/ssrn.841306

Claudio E.V. Borio (Contact Author)

Bank for International Settlements (BIS) - Research and Policy Analysis ( email )

CH-4002 Basel, Basel-Stadt
Switzerland

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