Towards a framework for macroprudential stance

Registration and coffee

Opening remarks

John Fell, European Central Bank
Enrica Detragiache, International Monetary Fund
Francesco Mazzaferro, European Systemic Risk Board

Session 1: Developing a macroprudential strategy

• What should a macroprudential strategy for achieving macroprudential policy objectives contain? How does the macroprudential stance relate to a macroprudential strategy?
• How do the objectives of financial stability and sustainable economic growth relate to one another?
• Which intermediate objectives, as defined by the ESRB (Recommendation 2013/1) and the IMF (Staff Guidance Note on Macroprudential Policy, December 2014), are used by authorities as operational specifications for the ultimate objective of financial stability? How detailed should these intermediate objectives be?
• How useful have authorities found these intermediate objectives?
• How do authorities map their (intermediate) objectives to the use of macroprudential instruments?

Moderator:
Mark Cassidy, Central Bank of Ireland

Speakers:
David Aikman, Bank of England
Marek Licák, Národná banka Slovenska
Jacek Osiński, Narodowy Bank Polski
Katja Taipalus, Suomen Pankki

Coffee break

Session 2: Key elements of a macroprudential stance framework

• How should the concept of macroprudential stance be defined? Should a definition be purely descriptive or also include an evaluation of whether macroprudential policies are achieving their objectives?
• What aspects of macroprudential stance should policymakers apply to the conduct of policy?
• What types of risk should a macroprudential stance framework cover? Should it cover cyclical as well as structural systemic risks?
• How should authorities account for systemic risks, resilience factors, macroprudential instruments and uncertainties in a macroprudential stance?
• At what level should the concept of macroprudential stance be defined (e.g. at the level of the ultimate objective of macroprudential policy or at the level of its intermediate objectives)?
• How can policymakers’ preferences, especially concerning risk tolerance, be reflected in a macroprudential stance framework?
• How should macroprudential stance take into account other policy areas, such as monetary, fiscal and economic policies?
• Are there any lessons to be learned from other policy areas (e.g. microprudential policy, monetary policy, fiscal policy or competition policy)?
• How should policymakers communicate the motivation behind, and the justification for, macroprudential policies in order to define a macroprudential policy reaction function?

Moderator:
Henrik Braconier, Finansinspektionen

Speakers:
Maria Demertzis, Bruegel
Leonardo Gambacorta, Bank for International Settlements
Simonas Krėpšta, Lietuvos bankas
Javier Suárez, Advisory Scientific Committee of the ESRB, CEMFI

Lunch break

Session 3: Country-specific experiences of challenges related to the implementation of macroprudential policies

• Can authorities condense the objective(s) of macroprudential policy into one measurable target? How do they deal with combinations or aggregations across risks and sectors?
• What limitations do authorities face when quantitatively measuring macroprudential objectives?
• How are reference values determined to assess whether macroprudential policies are achieving their objective(s)?
• How do authorities select a mix of policy instruments to achieve a certain macroprudential objective? How do they measure and account for interactions between instruments?
• Are there any lessons to be learned from previous combinations of instruments and the order in which they were used to achieve certain macroprudential objectives?
• What could be considered as an optimal stage of the financial cycle for the activation of macroprudential instruments?
• Which approaches are authorities using to calibrate their macroprudential instruments and what are their respective strengths and weaknesses?
• How is the interaction with other policies (e.g. microprudential policy, monetary policy and fiscal policy) taken into account?

Moderator:
Jesper Berg, Finanstilsynet

Speakers:
Rochelle Edge, Board of Governors of the Federal Reserve System
TorbjØrn Haegeland, Norges Bank
Willem Heeringa, De Nederlandsche Bank
Ratna Sahay, International Monetary Fund

Coffee break

Session 4: Country-specific experiences of assessing the effectiveness and efficiency of macroprudential policies

• Which costs/benefits do policymakers take into account in their ex ante and ex post assessment of the overall mix of macroprudential policies?
• Which methods do policymakers use for such assessments? Which time horizons are used? What quantitative methods are available and where do qualitative assessments come into play?
• How does the cost/benefit analysis feed into decisions regarding the policy mix and instrument calibration, and how are policymakers’ preferences taken into account in the analysis?
• How do policymakers assess the possible transmission channels of macroprudential instruments?
• How do policymakers relate the objective of financial stability to the possible impact of policy actions (or the absence of such actions) on economic growth?

Moderator:
Francesco Mazzaferro, European Systemic Risk Board

Speakers:
Alexandra Lai, Bank of Canada
Javier Mencia, Banco de España
David Orsmond, Reserve Bank of Australia
Evan Papageorgiou, International Monetary Fund

Closing remarks

Enrica Detragiache, International Monetary Fund
John Fell, European Central Bank
Francesco Mazzaferro, European Systemic Risk Board

End of workshop