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Building on Incomplete Foundations: Financial Stability Policy since the Crash

Published online by Cambridge University Press:  01 January 2020

Richard Barwell
Richard Barwell*
Affiliation:
BNP Paribas Asset Management and London Institute of Banking and Finance
*
E-mail: [email protected]
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Abstract

Economists understand that a fit for purpose policy regime requires a reliable general equilibrium model of the system in question and a well specified description of the objectives that the policymaker is trying to pursue. The current financial stability regime has neither and without these critical foundations the regime is fundamentally fragile and incomplete. There is no anchor on the conduct of policy, an absence in genuine accountability and, as a result, reputational risks for policy institutions.

Keywords

financial stabilityfinancial crisesmacroprudential policyloss functionD78E58E61G18
Type
Research Articles
Information
National Institute Economic Review , Volume 241 , August 2017 , pp. R33 - R47
Copyright
Copyright © 2017 National Institute of Economic and Social Research

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Footnotes

The views and opinions expressed in this article are those of the author and do not necessarily reflect the position of BNP Paribas Asset Management or the London Institute of Banking and Finance.

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