This in turn allows monetary policy to focus on price stability. In other words: macroprudential policy can “unburden” monetary policy.11 So how does it work in practice? National authorities can choose to take macroprudential measures. The ECB then has the power to top-up some of these measures. And while national authorities are the key players, it also makes sense to involve the ECB.
This helps to keep an eye on any cross-border spill-overs and to alleviate any inaction bias that may still exist at national level. A good example of the important role that the ECB plays in macroprudential policies is the methodology it has developed for minimum additional capital to be held by regional systemic relevant banks.