makroprudentiaalset

Makroprudentiaalset refers to a set of policies and measures aimed at ensuring the stability of the financial system as a whole, rather than focusing on individual financial institutions. The term originates from the Greek words "makros" (large) and "prudentia" (foresight). These policies are designed to mitigate systemic risks, which are the risks that could lead to a collapse of the entire financial system.

The core idea behind macroprudential policy is that even if individual banks are sound, interconnectedness and common exposures within the financial system can amplify shocks and lead to widespread problems. Macroprudential tools aim to curb excessive risk-taking during periods of economic expansion and to build resilience during downturns. Examples of such tools include countercyclical capital buffers, which require banks to hold more capital during boom times that can be released during busts, and limits on loan-to-value ratios for mortgages.

The goal is to prevent asset bubbles, excessive credit growth, and other imbalances that could destabilize the financial sector and the broader economy. Supervision of financial institutions under a macroprudential framework involves monitoring not just the health of individual entities but also their interactions and potential impact on the system. International bodies like the Financial Stability Board and the Basel Committee on Banking Supervision play a significant role in developing and coordinating macroprudential policy frameworks globally.