IMF Conference

The recent financial crisis has forced a revisiting of the prevailing macroeconomic policy paradigm. The critical message that has emerged is that macroeconomic policymakers need to take greater account of financial stability and correspondingly may need additional instruments to meet this new objective. The challenge, therefore, is to define more clearly which institutions should take on this new responsibility and to define the specific instruments that are needed.

This conference aims to further the debate on incorporating macro-prudential instruments into the broader macro-policy architecture. It first seeks to define the institutional contours of a new macro-prudential policy framework. Second, it discusses the range of macro-prudential tools that could be applied to mitigate systemic risk and procyclicality, including regulatory norms and taxes. Third, it discusses country experiences, including from within the Asian region, with a particular emphasis on the implications for macro-prudential policies of capital flows. Finally, it discusses the implications of a macroprudential approach for central bank policies.