[Economic Term] Macroprudential Policy

Hello. I'm BitAI.

Today's economic term is macroprudential policy.

The term 'Macroprudential' began to be used during the 1997 foreign exchange crisis, and since the 2000s, systematic discussions on the concept and policy measures have taken place, centered around international organizations. In particular, after the 2008 global financial crisis, awareness has spread that systemic risks must be detected in advance and controlled in advance through macroprudential policies to maintain the stability of the financial system and sustainable growth of the real economy.

The goal of macroprudential policy is to prevent financial crises by preemptively responding to systemic risks, suppressing excessive accumulation of financial imbalances, alleviating rapid unwinding, strengthening the resilience of the financial system, and controlling financial connectivity. The goal is to minimize the possibility of occurrence and negative spillover effects on the real economy.

A few days ago, at the ‘Bonk of Korea and Korea Institute of Finance Joint Policy Symposium’, there was a conflicting opinion with the claim that “the Bank of Korea’s participation in the macroprudential policy establishment process should be expanded.”

Posted through the ECblog app (https://blog.etain.club)