MACRO PRUDENTIAL REGULATION:TARGET,INSTRUMENTS AND INSTITUTIONAL ARRANGEMENT

From the experience of financial crisis in the past 40 years,financial imbalance became a recurrent phenomenon as the development of financial market.The mutual strengthening mechanism between financial and macroeconomic imbalance led to an obvious and long-lasting deviation from the normal standard.Under the negative effect of the financial procyclicality,financial and macroeconomic stability could not be reached unless macro prudential regulation put into policy framework.The macro prudential regulation emphasized that,the risk of the financial system should be assessed from the overall perspective of the interaction between economic behavior,financial market and financial institutions.The design of financial system should take this interaction into consideration.