Its purpose is to reduce the moral hazard problems which are linked to the problems of explicit or implicit government guarantees and the too-big-to-fail. It strengthens the incentives for prudent risk management and the correct pricing of risks. It will make banks more resistant to the temptations which the low interest rate environment may entail.
Second, the EU and the member states are now implementing new macro-prudential instruments which are designed to improve the stability of the financial system as a whole. Macro-prudential policies are very closely related to the problem of ensuring the independence of monetary policy from financial dominance.