Risk Management Through the Lens of Macroprudential Policy

Journal of Risk Management in Financial Institutions, Vol. 6, No. 2, pp. 120-128, 2013

9 Pages Posted: 22 Apr 2013

See all articles by Sam Langfield

Sam Langfield

European Central Bank

Carmelo Salleo

Bank of Italy

Olaf Weeken

Bank of England - Monetary Analysis

Jeroen Brinkhoff

European Central Bank (ECB)

Francesco Mazzaferro

European Central Bank (ECB)

Date Written: March 14, 2013

Abstract

Before the beginning of the crisis in 2007–8, regulation failed to cope with the complexities of modern finance and paid insufficient attention to systemic risk. Similarly, risk managers in financial institutions tended to focus on risks in their financial institutions, neglecting systemic risk. Regulators worldwide are now addressing these deficiencies. One important dimension of regulatory reform is the creation of macroprudential authorities, such as the European Systemic Risk Board (ESRB), specifically tasked to focus on systemic risk. To address such risks, the ESRB has issued recommendations that will influence the behaviour of financial institutions. Work is ongoing to develop fully fledged macroprudential policies, which in combination with other regulation will help prevent or mitigate future crises.

Keywords: Financial stability, systemic risk, macroprudential policy, risk management

JEL Classification: E44, G15, G18, G20

Suggested Citation

Langfield, Sam and Salleo, Carmelo and Weeken, Olaf and Brinkhoff, Jeroen and Mazzaferro, Francesco, Risk Management Through the Lens of Macroprudential Policy (March 14, 2013). Journal of Risk Management in Financial Institutions, Vol. 6, No. 2, pp. 120-128, 2013, Available at SSRN: https://ssrn.com/abstract=2254796

Sam Langfield (Contact Author)

European Central Bank ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Carmelo Salleo

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

Olaf Weeken

Bank of England - Monetary Analysis ( email )

Threadneedle Street
London EC2R 8AH
United Kingdom

Jeroen Brinkhoff

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Francesco Mazzaferro

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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