Macroprudential policies are directed at achieving greater financial stability. An important element of the macroprudential approach is conducting analyses to get a good understanding of the risks building up in financial institutions and the sector as a whole.
These analyses are forward-looking, and they include simulations of the impact of economic shocks on the soundness of the financial sector and its institutions, so-called stress tests. Based on the results of these tests, macroprudential policies are developed aimed at strengthening the resilience of the financial sector against shocks.