Experience has dispelled such beliefs and has shown that the business cycle and the financial cycle are not necessarily synchronized; long periods of disconnect between the two cycles can  BIS central bankers’ speeches  1  materialize. In particular, the financial cycle tends to have larger amplitude and lower frequency than the normal business cycle.
Macro-prudential policy bridges the gap between the traditional micro-prudential supervision of individual banks and monetary policy. Its objectives are, first, to enhance the resilience of financial institutions and the entire financial system, and, second, to smooth the financial cycle. In this regard, macro-prudential policy allows monetary policy to focus on maintaining price stability, while micro-prudential supervision focuses on individual institutions.