BIS central bankers’ speeches  1  When defining the confines of macroprudential policy, it is also important to understand its relationship with monetary policy. In the long term, financial stability is a prerequisite for price stability. Hence the two policy areas are clearly intertwined. However, in the short- and medium-term the economic cycle and the financial cycle can behave quite differently.
To deal with the latter, a separate set of macroprudential policy instruments is needed. This way the two policy areas can best advance their common longterm interests. Next I will talk about 1.  the challenges of macroprudential policy in the current juncture and especially in the European context. 2.