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Macroprudential framework:key questions applied to the French case

Author

Listed:
  • Bennani, T.
  • Després, M.
  • Dujardin, M.
  • Duprey, T.
  • Kelber, A.
Abstract
This paper presents the main features of macroprudential policy with a focus on the French case. We first recall the ultimate objective of this policy, which is to prevent and to mitigate systemic risk, i.e. the risk of “widespread disruptions to the provision of financial services that have serious consequences for the real economy” (CGFS, 2012). We put forward two goals to achieve this ultimate objective, namely (i) increasing the resilience of the financial sector and (ii) leaning against the financial cycle. Then, in the context of the ongoing reflections on the organisation of macroprudential policy at the national and European level, we analyse the macroprudential institutional framework recently adopted in France. We discuss the instruments available to macroprudential authorities in light of the two main goals of macroprudential policy. Drawing on theoretical considerations and past experience, we favour a macroprudential toolkit broadly consistent with the European CRD IV/CRR package. Finally, we emphasise the need for macroprudential authorities to be able to monitor and detect systemic risk. To this end, several indicators and their reliability are analysed.

Suggested Citation

  • Bennani, T. & Després, M. & Dujardin, M. & Duprey, T. & Kelber, A., 2014. "Macroprudential framework:key questions applied to the French case," Occasional papers 9, Banque de France.
    • Handle: RePEc:bfr:opaper:9
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    References listed on IDEAS

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    2. Oriol Carreras & E Philip Davis & Rebecca Piggott, 2016. "Macroprudential tools, transmission and modelling," National Institute of Economic and Social Research (NIESR) Discussion Papers 470, National Institute of Economic and Social Research.
    3. Oriol Carreras & E Philip Davis & Ian Hurst & Iana Liadze & Rebecca Piggott & James Warren, 2018. "Implementing Macroprudential Policy in NiGEM," National Institute of Economic and Social Research (NIESR) Discussion Papers 490, National Institute of Economic and Social Research.
    4. Benbouzid, Nadia & Kumar, Abhishek & Mallick, Sushanta K. & Sousa, Ricardo M. & Stojanovic, Aleksandar, 2022. "Bank credit risk and macro-prudential policies: Role of counter-cyclical capital buffer," Journal of Financial Stability, Elsevier, vol. 63(C).
    5. Georgios Magkonis & Karen Jackson, 2019. "Identifying Networks in Social Media: The case of #Grexit," Networks and Spatial Economics, Springer, vol. 19(1), pages 319-330, March.
    6. Carreras, Oriol & Davis, E. Philip & Piggott, Rebecca, 2018. "Assessing macroprudential tools in OECD countries within a cointegration framework," Journal of Financial Stability, Elsevier, vol. 37(C), pages 112-130.
    7. Gerba, Eddie & Macchiarelli, Corrado, 2016. "Interaction between monetary policy and bank regulation: theory and European practice," LSE Research Online Documents on Economics 68344, London School of Economics and Political Science, LSE Library.

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    More about this item

    Keywords

    macroprudential policy; central bank; systemic risk; financial crisis;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G01 - Financial Economics - - General - - - Financial Crises
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General

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