| Author (Corporate) | European Parliament: European Parliamentary Research Service |
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| Publisher | EU |
| Series Title | In-Depth Analysis |
| Series Details | May 2017 |
| Publication Date | May 2017 |
| ISBN | 978-92-846-0834-8 |
| Content Type | Report |
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Please note: Each In-Depth Analysis is assigned a DOI (digital object identifier), which is a safe and long term way of ensuring a hyperlink to the full text of this report. However, when ESO creates this record, on occasion the DOI still has not been activated by the EU Bookshop. If you find the source url hyperlink does not work please use the alternative location hyperlink listed as a related url.In the aftermath of the financial crisis, there is consensus among academics and policy makers on the need for the so-called macroprudential policies. Additionally, the current low interest-rate environment creates further risks to financial stability. However, the implementation of such policies in a monetary union is a rather complex issue. Housing and credit markets heterogeneity across countries calls for action at national level. The role of the ECB in macroprudential policy is a matter of debate because monetary policy can conflict with the ultimate goal of macroprudential policy. This document reviews the key issues that are relevant for the implementation of macroprudential policies in the euro area and questions the current institutional framework. Finally, it gives some policy recommendations on how to improve the current situation. See also the separate In-Depth Analysis The role of macro-prudential policy in the prevention and correction of divergences in the euro area (link through the related url) The euro area suffers from economic and financial imbalances between its members. Macro-prudential policy can help remedy this in as much as it can be deployed both at euro area level and Member State level. A macro-prudential policy framework to regulate financial cycles at Member State level and improve the resilience of systemic groups at euro area level would improve the economic and financial stability of the euro area and each of its members. Drawing on an inventory of the current practices and the teachings of recent academic work, the authors have formulated 15 proposals which aim to identify effective macro-prudential instruments to achieve this stability and, in a context of institutional transformation (Banking Union, Brexit, etc.) likely to facilitate changes, to streamline the institutional framework. |
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| Source Link | http://dx.publications.europa.eu/10.2861/174124 |
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| Subject Categories | Economic and Financial Affairs |
| Countries / Regions | Europe |
