It is essential, therefore, that we bridge the gap between financial stability, or macro-prudential supervision, on the one hand and micro-prudential, or traditional supervision, on the other. In this context, the European Commission has proposed a new supervisory framework for the EU based on the de Larosière proposals.
Of course, in addition to the New Keynesian framework, there is also a wider literature studying the implications of household heterogeneity for macroeconomic dynamics through a variety of mechanisms. See, among others, Huggett, M. (1996) “Wealth distribution in life-cycle economies”, Journal of Monetary Economics, Vol. 38(3), pp.