Macroprudential bulletin : Issue 1 / 2016, March 2016

Since the financial crisis, the concept of macroprudential policy has progressively gained ground. The aim of macroprudential policy is to increase the resilience of individual financial institutions and of the financial system as a whole. It is also used to smooth out the financial cycle, determined by fluctuations in credit, leverage and asset prices, which may otherwise result in a pattern of boom and bust. The ECB has, in co-operation with national authorities, set up a macroprudential policy framework for the euro area, in order to achieve these important objectives. The ECB's responsibilities in the area of macroprudential policy stem from the Single Supervisory Mechanism (SSM) Regulation. Published biannually, the Bulletin enhances transparency on macroprudential policy in the euro area. In this first edition, we present our framework for macroprudential policy and discuss its objectives and governance structure, as well as the policy instruments available. The Macroprudential Bulletin is a channel to inform about ongoing research in macroprudential policy areas, and illustrates how it is applied in dedicated policy work at the ECB. This bulletin provides some examples of the analytical tools developed by the ECB and used to form a view on the adequate level of macroprudential capital requirements. In addition, the Macroprudential Bulletin may also refer to macroprudential regulatory issues under discussion, and give an overview of recent announcements on macroprudential instruments adopted by national authorities in the euro area. The Macroprudential Bulletin marks the starting point for regular reporting on analytical tools and models used to support macroprudential policy analysis in the euro area.