Examples of using Macroprudential in English and their translations into Japanese
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Microprudential policy aims to ensure the financial soundness of individual financial institutions. By contrast, macroprudential policy aims to ensure the stability of the financial system as a whole by analyzing and assessing risks within that system and formulating, based on the findings, institutional designs and policy responses to mitigate such risks.
Concluding Remarks Today, I have taken a look at the efforts and results at the global level in aiming to prevent the return of the Global Financial Crisis, particularly in terms of policy areas that are closely related to the role of the central bank. Specifically, these are international financial regulation, macroprudential policy, the"lender of the last resort" function of central banks, and low profitability at financial institutions.
The reliance on stronger regulation is informed by the success of New Deal regulatory reforms, but current reform efforts go even further by working to identify and defuse risks not only to individual firms but to the financial system as a whole, an approach known as macroprudential regulation.
In Japan, the Financial Services Agency(FSA)-- which is legally authorized to conduct industry-wide supervision and inspections-- and the Bank-- which contributes to financial system stability, such as through the"lender of last resort" function-- are making joint efforts in carrying out macroprudential policy, fulfilling their respective functions.
Unconventional policy and beyond Before concluding my remarks today, I would like to emphasize that, if changes in the potential growth rate would influence the effectiveness of monetary and macroprudential policies, and ultimately affect price and financial stability, that would naturally affect central banks' thinking on policy formulation.
Put into a policy context, this can be rephrased as the issue of the division of roles between monetary policy and macroprudential policy. That is, the question is whether we should consider macroprudential policy as the first line of defense for financial stability and monetary policy aiming at ensuring price stability as the last line of defense, or whether we should take account of both price stability and financial stability in the management of monetary policy.
Importantly, structural reform is moving forward in the financial sector, with ambitious domestic and international efforts underway to enhance the capital and liquidity of banks, especially the most systemically important banks; to improve risk management and transparency; to strengthen market infrastructure; and to introduce a more systemic, or macroprudential, approach to financial regulation and supervision.
The Current Situation in Japan 's Financial System and Macroprudential Policy.
One such topic regards the effective institutional arrangements for macroprudential policy.
Moreover, we also see the development of institutional frameworks for the implementation of macroprudential policy.
On the institutional aspect of conducting macroprudential policy, the United Kingdom has made a substantial institutional reform.
The objective of macroprudential policy is to strengthen the resilience of the financial system and contain systemic risk.
Second, let me shift my focus to international financial regulations as a form of"structural" macroprudential policy.
Slowing domestic demand due to rises in interest rates and macroprudential measures reflected negatively on payment performance.
After the global financial crisis, the importance of having a macroprudential perspective has been underlined following a similar thought process.
A macroprudential perspective The second point crucial for preventing the emergence and worsening of a financial crisis is the importance of maintaining a macroprudential perspective.
There are two contrasting views on the relationship between monetary and macroprudential policies: the separation principle and leaning against the wind.
Subsequently, as Israeli housing prices ran upward, Stan became an advocate and early adopter of macroprudential policies to preserve financial stability.
We welcomed initial work by FSB- IMF- BIS on macroprudential policy and look forward to further work in 2012.
As I have talked about today, knowledge regarding macroprudential policy has been accumulated and the remaining issues to be tackled have become clearer.