18  Brunnermeier, M., A. Crockett, C. Goodhart, A. Persaud and H. Shin (2009), The fundamental principles of financial regulation, 10th Geneva Report on the World Economy, July. 8  BIS Review 165/2009  form of systemic risk. While macro-prudential supervision is at the forefront of preventing severe asset bubbles from emerging, this may not be sufficient, given the macroeconomic components of cycles.
Therefore, macroeconomic stabilisation policies need to make their contribution to reducing pro-cyclicality. 19 Macroeconomic authorities have faced the challenge posed by financial booms and busts in two ways. First and foremost through solid institutions: the pre-emptive arm against system instability. Stability-oriented macroeconomic frameworks have ensured price stability and economic prosperity in all developed countries for the last quarter of a century.