The interlinkages between the financial system and the macroeconomy further strengthen the rationale for assigning to the central banks the responsibility for macroprudential analysis and the formulation of recommendations concerning macro-prudential policies. What is the nature of the policy instruments of macro-prudential supervision? Macroprudential policies will concern, to a considerable extent, regulatory and supervisory action.
They could take the form of general guidelines or concrete recommendations relating to the calibration of prudential tools. For example, macro-prudential recommendations could involve the adjustment of capital requirements or the setting of additional capital buffers in the banking system as a whole, or entail guidance regarding leverage ratios and liquidity management. Macro-prudential policies would not concern individual financial institutions.