The macroprudential use of margins and haircuts : February 2017

This report considers the use of margins and haircuts to meet macroprudential objectives. It (i) explains the need for macroprudential policies to mitigate systemic risk from excessive leverage and procyclicality in collateral requirements; (ii) sets out how margins and haircuts could, in principle, be used as macroprudential tools; (iii) identifies and sketches out a number of potential tools; and (iv) highlights practical challenges in the implementation of such tools that require further work.