Macroprudential policy

Macroprudential policy centres on safeguarding the stability of the financial system as a whole by limiting systemic risk. Its main objectives are to maintain the stability of the financial system and shore up resilience, thereby reducing the risk of financial shocks. Among other actions aimed at assessing financial system resilience, the Central Bank conducts stress tests and scenario analyses of key risk factors. If there is reason to limit the accumulation of risk in the system, it is possible to apply policy instruments known as macroprudential tools. Among these are rules on capital buffers for financial institutions, foreign exchange balance and liquidity, and net stable funding, as well as rules rules restricting the risk that borrowers may takesuch as restrictions on loan-to-value ratios and debt service-to-income ratios. Decisions on the application of macroprudential tools are taken by the Financial Stability Committee. The Committee bases its decisions on an analysis of the position of the financial system, the financial markets, the economy as a whole, systemic risk, and resilience against potential shocks.