By mitigating systemic risk, macroprudential policy ultimately aims to reduce the frequency and severity of financial crises, contributing to overall macroeconomic stability. Macroprudential policy seeks to increase the resilience of the financial system to aggregate shocks by building buffers that absorb their impact, thereby preserving its ability to provide credit to the economy.
It can limit the build-up of systemic vulnerabilities over time, by reducing the procyclical feedback between asset prices and credit developments and by containing unsustainable increases in leverage and volatile funding. In addition, 1 2  I wish to thank Emilia Bonaccorsi, Federica Ciocchetta, Wanda Cornacchia, Alessio de Vincenzo and Giuseppe Napoletano for their valuable input and comments.