The Promise and Peril of Macroprudential Policy
Central bankers continue to fret about frothy asset markets – as well they should, given the financial crisis of 2008-2009. But, rather than standing idly by, policymakers should be developing a set of tools specifically tailored to limit the buildup of financial-sector risk.
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MONTEVIDEO – Central bankers continue to fret about frothy asset markets – as well they should, given the financial crisis of 2008-2009. Having been burned once, they are now doubly shy. And China’s recent stock-market plunge has certainly not eased their fears.