Consistency among macro-prudential, micro-prudential and monetary policy Secondly, consistency with other policies is another important precondition for the efficiency of macro-prudential policy. To put it another way, macro-prudential policy alone is not likely to bring financial stability, without consistent macro-economic policy and micro-prudential policy.
When the asset bubble was at its height, Japan’s regulatory authorities tried to impose a ceiling on the aggregate amount of real estate-related bank loans. Although the term “macroprudence” was not on everybody’s lips at that time, the restriction imposed on overall real estate-related lending had a strong tinge of macro-prudential policy. Unfortunately, such regulation was not able to stabilize the whole financial system.