It can complement the action of the single monetary policy and contribute to high and sustainable economic growth in the monetary union. Recent experience shows that macroprudential policy in the euro area is already active. Going forward, we need to complete the toolkit in the hands of European authorities to enhance coordination, reduce spill-overs and to prepare for the Capital Markets Union.
Macroprudential policies are crucial to cope with systemic risk and endogenous cycles in the financial sector. They are particularly important in the euro area at the current juncture, as the global environment of low interest rates and the rise in shadow banking activities exposes the financial sector to increased risks. Macroprudential and monetary policy rely on separate tools and aim at achieving different objectives.