Author: Ionuţ Mircea

Introduction. The macro-prudential tool kit deals with those risks that contributed to the outbreak of the last economic crisis or materialized during it, namely the excessive credit growth, the excessive price assets growth driven by the credit growth, the excessive increase in leverage, the liquidity risk, the volatile capital flows and foreign currency lending. It can be argued that macro-prudential policies underestimated the systemic risks mentioned, although they were better positioned than other policies aimed at financial stability. The impact of macro-prudential policy is difficult to be determined, because is usually applied simultaneously and in the same direction with other macroeconomic policies.

Aim of the study. This paper aims to highlight that it is necessary a better coordination of policies and a better calibration of instruments in order to get a quick and effective response during their implementation. These must be in line with national specificities and the risks identified. Until the new macro-prudential tools introduced by Basel III will prove their effectiveness, the issue of finding proper tools is still open.
Keywords: banking system, risks, macro-prudential, liquidity, crisis
JEL Classification: E58, E59, E60

Read More