This gave a very clear 14  BIS central bankers’ speeches  idea of how many households and banks might be affected by such an intervention and by how much. This was a macro-prudential policy calibrated from micro-prudential constituents. Although a first step, there is clearly further to go in using micro-level data to calibrate the impact of macro-prudential tools on lender and borrower behaviour. Turning to the global economic and financial system, it is here where the existing policy architecture may at present be most deficient. Some have gone further and argued that there is nothing at present that much resembles a global financial architecture at all (de Larosiere (2014), Haldane (2014)). Despite the crisis being the first truly global one, reform of the global financial architecture has been slow. There are many dimensions to reform of the global financial architecture. These include the appropriate role and resourcing of the IMF, the reserve currency role of the dollar and the appropriate role of so-called for capital flow management policies to modulate fluctuations in the global flow of funds (IMF (2012)). Each of these has been widely discussed and debated over many decades. On some issues, there has been progress. For example, the IMF now endorses the use of capital flow management policies in some situations, in contrast to its position a few years ago. But there is one area where progress in strengthening the international financial architecture has been much slower.
This in a sense underscores the importance of Tinbergen’s augmented policy rule – that there should be as many policy tools as there are complex sub-systems – when managing a complex system of systems. None of the models so far considers global spill-overs, either through trade or financial channels. Generally-speaking, there is a dearth of macro-economic models which take seriously these international spillovers in an analytically-coherent fashion. Even if modelling this behaviour is over-ambitious in the short-term, there may be merit in improved monitoring of these global flows of financing over time, given their importance for the stability of economies and financial systems. Elsewhere, I have likened this to the creation of “global weather map”. This could be used to track and map the source, scale and nature of cross-border capital flows in close to real-time (Haldane (2012, 2014) and IMF (2013)). Plotting this complex, rapidly-adapting web would be a natural precursor to using it to address “what if” questions. What, for example, would be the impact of a rise in US interest rates on the international flow of funds? The IMF would be the natural guardians of this surveillance-cum-stress-testing machine. (c)  Policy design  Significant changes have been made to the macro-financial policy architecture since the crisis. In general, these frameworks have moved closer towards meeting Tinbergen’s rule of having as many distinct policy tools as there are complex layers in the macro-financial system.