This has implications for the institutional set up of macroprudential policies:  Macroprudential policy at the national level is needed to address vulnerabilities that are rooted in country-specific preferences and institutions. This holds particularly in a monetary union with economies that are highly integrated financially (Figure 7), but heterogeneous along important dimensions that can significantly affect financial stability risks.
In addition, the interest rate benchmarks that monetary policy sets will directly impact the cost of leverage and the volume of credit exposures. Obviously, the use of one policy lever (in this case, policy interest rates) would not always be able to address – at the same time – two policy objectives (price stability vs. financial stability) without conflict.