About this learning event

With the implementation of the Basel III framework, regulators have, at their disposal, a wide range of instruments that they can use to steer risk-taking, according to the financial and macroeconomic conjuncture.

At this workshop, we will look into the analytical tools and methodologies that are used in the decision-making process and assess the impact of individual instruments and the global policy mix.

We will discuss:

• Macroprudential policy and financial stability
• Capital buffer framework
• Implementation of borrower-based instruments
• Risks in the non-bank financial institution sector
• Central bank interventions to stabilize markets
• Operationalization of macroprudential policies
• Simulating the implementation of macroprudential policies at a central bank
• The ECB’s approach to macroprudential policies and financial stability
• Latest developments in macroprudential policy research at the Bank of Slovenia

 

What specifically will we learn and do

We will investigate how different countries have used their toolkits throughout recent crises and learn about how macroprudential instruments can mitigate financial risks, as well as macroeconomic shocks within an interactive simulation. International experts will present their experience and facilitate knowledge exchange based on their experiences in operationalizing macroprudential frameworks.

Participants will be given an overview of the UK’s regulatory framework, the macroprudential policy and tools, with focus on the institutional and governance framework for financial stability policy. In addition, the UK Financial Policy Committee's (FPC) hard and soft tools will be covered – including capital & leverage ratio tools (and stress testing) and the housing market tools.

Further, the UK's approach to macroprudential assessment of risks to financial stability arising from beyond banks will be discussed. The regulatory landscape of non-bank financial institutions and activities within and outside the regulatory purview of the Bank of England, the FPC’s assessment of resilience of market-based finance and systemic risks from crypto assets, climate risk etc will also be covered. In addition, we will look at central bank actions to address financial stability risks due to markets dysfunction arising from the non-bank sector.

Participants will also be given an overview on macroprudential policy making at the European Central Bank, covering institutional arrangements within the European Banking Union and the ECB’s frameworks for macroprudential risk and policy assessments. Special attention will be given to the prudential response to the pandemic and possible lessons learnt for the future.

Special attention will be given to the framework developed by the Bank of Slovenia, which has implemented a comprehensive set of macroprudential instruments and gained ample experience in applying macroprudential measures in practice. The presentation will look into how the bank actively responded to a complex macro-financial environment in order to mitigate risks.

Finally, participants will work on a case study that presents a framework for analyzing the effects of implementing new macroprudential policies or modifying existing ones. In groups, they will use a simulation tool to answer questions about setting capital buffer rates and calibrating borrower-based instruments such as the LTV and DSTI. The teams will prepare short presentations about their findings and share their insights in a discussion session.

Who should attend

This workshop is intended for officials from central banks and financial supervision authorities, working in the field of financial stability and macroprudential supervision. We will consider applications from officials working on related areas. More particularly, participants working in the fields on regulation and supervision will gain from learning about the macrofinancial and economic interactions of macroprudential policies.

The workshop is highly interactive and participants are required to actively participate at all parts of the event. The event includes work in groups on case studies and discussion sessions, so a working knowledge of English is required to take part.

Faculty

• Alexandru Monahov, Expert Consultant, Financial Stability Division, National Bank of Moldova
• Markus Behn, Team Lead, Financial Stability, European Central Bank
• Christine Jayaseelan, Adviser, Centre for Central Banking Studies, Bank of England
• Črt Lenarčič, Head of Section, Financial Stability and Macroprudential Policy, Bank of Slovenia

Practical information

For all the necessary information  please read the General Information on Learning at CEF.

 

Partners

This learning initiative was supported by: