The Bank of International Settelements (BIS) – the central banks’s central bank – is out with an important paper on macroprudential frameworks. In other words, how central banks and other institutions can actually have an affect on the financialisation of markets and assets.
The first point made is quite stark. Macroprudential or systemetic risk management wasn’t even on anyone’s radar before the GFC, but now is de rigueur:
Of course it was the failed theory of neoclassical economies, which culminated in the turkey that was The Great Moderation, that put paid to this lack of proper risk management. As BIS puts it:
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