BIS Review 90/2009  5  and to acting as ultimate providers of emergency liquidity. There is now an international consensus that a central bank is well placed to contribute to macro-prudential analysis given its inherent function as monetary authority. While micro- and macro-prudential analyses are both tools used to promote financial stability, they differ markedly in approach and methodology.
Macro-prudential analysis treats aggregate risk as endogenous and, unlike micro-prudential analysis, is therefore not focused on the analysis and surveillance of individual financial institutions. For this reason, it evaluates systemic risk and considers correlations and common exposures across institutions rather than within institutions. Contributing to financial stability using such an approach is a natural extension of a central bank’s mandate under the EU Treaty.