*  *  *  Thanks to Mike Hannah and Bernard Hodgetts for assistance in preparing this speech and to Grant Spencer, Toby Fiennes, Michael Reddell, Yuong Ha and Anella Munro for useful comments.
Introduction Following the Global Financial Crisis, there has been general acceptance of the need for central banks and financial regulators to adopt a greater “macro-prudential” orientation to their supervision of financial systems and institutions. While the objectives of prudential policy are usually systemic, the policies have focused on ensuring the balance sheets of individual institutions are robust to shocks.