Macroprudential objectives and challenges

Over at the Duke University Law School's FinReg Blog, Charles and Alfred discuss the objectives and challenges of macroprudential policymaking, based on their recent paper, Reform of the UK Financial Policy Committee. The post includes a discussion of macroprudential policy in the current crisis. The following excerpt is taken from the blog post:

During the current economic crisis resulting from measures taken to tackle COVID-19, the most popular macroprudential policy change has been cutting the countercyclical buffer. Since other components of banks’ capital requirements are more difficult to manipulate, policymakers have turned to supplementary measures—unconventional macroprudential policies, if you will. In particular, regulators around the world have eased—temporarily, they claim—how some rules are enforced.

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