In addition, it is possible to use and/or revive more specific regulatory tools that affect the financial system, for instance maximum loan to value ratios and other mortgage terms, margin requirements, and other regulations that were in place during the post-Great Depression and post-World War II period, which have fallen out of use or been repealed.
The argument about macroprudential regulation is closely related to a topic that has been discussed repeatedly at these conferences – how the central bank should respond to asset prices, and particularly to perceived asset price bubbles. This discussion has suffered from three distortions.