Macroprudential supervision in non-euro area European countries

In addition to monetary policy, macroprudential policy can be fundamentally used by countries to contain risks threatening the stability of their financial systems. As macroprudential policy becomes more important, European countries have also begun to consider the establishment of national macroprudential frameworks. This process is underway in two fields: creation of an institutional background, and the development and operation of an appropriate macroprudential toolkit. Concerning the first field, three basic options are available. In countries with microprudential oversight systems embedded in the central bank, the central bank typically takes on the role of a macroprudential authority. In the case of all other institutional arrangements, either a financial stability committee composed of representatives of the supervisory authority, the government and the central bank is set up, or the earlier institutional structure is maintained and the cooperation between the parties involved is reinforced in order to ensure the well-foundedness of systemic interventions. As for the other field, the establishment of a toolkit designed to enable the macroprudential authority to act in a direct way at the systemic level is underway. Some countries already have experience concerning the operation of such toolkits: the authorities have already made specific decisions concerning certain macroprudential interventions based on capital or liquidity requirements. Examining the current practices of the European countries analysed in this study, we can see that the Hungarian macroprudential framework currently being established is in many ways consistent with the practices described below. In many respects, the institutional background1 (competences and responsibilities) of the macroprudential supervision evolving in Hungary even appears to be more coherent than those set up in some of the countries discussed.