The large literature on macro prudential regulation stresses the importance of using information obtained in the supervisory process to check for emerging bubbles and other imbalances.
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And so suddenly everybody's talking about macro prudential regulation.
Macro-prudential policies, given still tepid credit growth, especially among corporates, would help little.
Basel III makes explicit provision for capital ratios to be varied on a discretionary basis for so-called macro-prudential purposes, to deflate bubbles.
The government is dismantling the Financial Services Authority and giving the Bank of England control of macro-prudential regulation and oversight of micro-prudential regulation.
This was one of the first attempts by a central bank to try out the big new idea of the postcrisis world: macro-prudential regulation.
Once we get over the glut of shrinking spreads, these stocks will rise based on the new macro-prudential measures the government announced this month.
Including macro-prudential policies, monetary tightening, and credit controls, QT, added to fragile economic recoveries in Europe and North America, have led to a fall in the export complex.
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The Bank clearly believes the combined impact of the recent tightening across monetary, macro-prudential and fiscal policies will push inflation to its target, around 4.6% from the 6.3% 12 month rolling inflation currently.
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Andrew Tyrie, chairman of the Treasury Select Committee, told the BBC that Mr Carney "ticks all the boxes" but added that his committee would question him on matters such as how he will approach macro-prudential stability and what his views on quantitative easing are.
It's in effect a demand for the new macro-prudential regulator being created by the Treasury which will sit within the Bank of England - the Financial Policy Committee, of which Lord Turner is a member - to have important and unprecedented new powers to determine credit creation by banks and to determine the distribution of credit.
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