Adding banking supervision and, in particular, macroprudential policy to the central bank’s tasks, 3/7  BIS central bankers' speeches  shifts the emphasis more strongly towards preventive policies. Macroprudential policy can address financial stability risks in the specific areas where they arise, be it at the level of a country, a sector or a financial institution.
It can also effectively free monetary policy from the temptation to counter financial imbalances when systemic risks increase. This reduces the apparent need for leaning. At the same time, macroprudential policy reduces the likelihood and the severity of downturns should risks materialise. With these conceptual considerations in mind, let me now examine the specific responsibilities of the ECB, starting with its legal mandate.