In its forthcoming revision of the macroprudential framework of the EU, the European Commission should ensure that the EU legislative framework provides macroprudential policymakers enough flexibility and macroprudential space in applying their macroprudential tools. In my speech two years ago, I also underlined the need to broaden the scope of macroprudential policy beyond the banking sector.
This market-based approach permits each bank to decide whether to make use of this new authority. This decision will be based on the bank's internal business case analysis, which will assess the costs and benefits of using the new authority. We believe the market changes arising from these revisions to check law will result in substantial cost savings.