The macroprudential toolbox also includes instruments, notably resolution tools, that are needed in acute crises. Macroprudential policy is the first line of defence against spillovers of risk between the private and the public sector. In the absence of adequate buffers, risks may shift from the private to the public sector.
Interest rates on term instruments rose toward the end of 1999 due to market participants’ concerns about the Year 2000 problem, but declined around the turn of the year as these concerns were dispelled. The Japan premium remains negligible.