Macroprudential tools-for example, capital requirements for banks-are policies designed to protect the health of the U.S. financial system. Monetary policy-central banks influencing interest rates-has a different job: Its goal is to maintain stable prices and maximum sustainable employment. Since financial instability can prevent a central bank from achieving its goals, to what extent should central bankers use monetary policy to help supplement macroprudential tools?
Watch St. Louis Fed economist and Vice President Christopher Neely explain the debate over this question and describes the relation among monetary policy, macroprudential tools and systemic financial risks. The views expressed in this video do not necessarily reflect those of the St. Louis Fed or the Federal Reserve System.
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#monetarypolicy #macro #economics #finance #bank #risk
11 июл 2023