Macroprudential Regulation — A Delicate Balance

Summary

Following the crisis, the financial system was extensively reformed to strengthen microprudential regulation, focused on individual entities, and macroprudential regulation, to prevent the accumulation of imbalances in the whole system that may affect the real economy.

Key points

• Key points:
• Macroprudential instruments are important tools for stabilizing the economic cycle and therefore for financial stability.
• It is important to note that for macroprudential rules to have a stabilizing effect, the application of banking capital regulation must be uniform throughout the economic cycle.

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