While monetary policy is guided by a quantified inflation target, the target of macroprudential policy comprises several different dimensions. For example, macroprudential policies can be about reducing and preventing excessive credit growth, reducing liquidity risks and maturity mismatches in the banking system, and increasing the financial infrastructure’s resilience to shocks. In all cases, it is hard to formulate a simple and clear target. Evaluating macroprudential policy decisions and holding the decision makers to account is therefore harder. It is therefore important to make sure the democratic control of macroprudential policy is guaranteed and regularly safeguarded. However, this can occur by developing the structures of democratic follow-up and control of the Riksbank that are already in place, chiefly through the General Council of the Riksbank. We can also benefit from what we have learned from how monetary policy is monitored, for instance through the publication of reports, minutes and regular questioning in the Parliamentary Committee on Finance. 9  Riksbanken (2013) Remissyttrande om betänkandet Att förebygga och hantera finansiella kriser (SOU 2013:6), DNR 2013-234-STA. 10  The recommendation regarding national macroprudential policy mandates issued by the European Systemic Risk Board (ESRB) in December 2011 states that the EU countries should give one authority or one council the responsibility of implementing macroprudential policies.
The knowledge gained from this certainly benefitted the series of organisational transformation we undertook at Bank Negara Malaysia to enhance our organisational effectiveness. As this BIS meeting is taking place in Asia, allow me to take the opportunity to say something about our region. While Asia has not been immune to the turbulence and the upheavals taking place in the different parts of the world, the region has been able to rise to the challenge and each time has demonstrated the ability to experience a swift rebound. Factors that have contributed to this resilience is not so much what we have done in response to the developments but it is what we have done previously that prepared us to weather these developments. These factors in varying degrees have included undertaking rebalancing and structural adjustments of our economies, economic and financial reforms, the development of our financial systems, pursuing greater fiscal discipline, building a more extensive policy tool kits, building buffers during the good times and advancing regional integration and cooperation. BIS central bankers’ speeches  1  For most of the region, following these efforts, our more diversified economies have become less vulnerable to economic shocks, our more diversified and developed financial systems have been better able to absorb and intermediate the financial turmoil and turbulence, while the financial reforms have also increased our flexibility and produced better price and exchange rate adjustments. Those with sound macroeconomic fundamentals including more sustainable fiscal positions also had the policy space to manage the implications of these challenging developments.