Czech National Bank survey on macroprudential and monetary policy

The purpose of the survey, completed in 2021 2Q, is to collect academic and professional expert opinion on the impact of macroprudential policy measures, their interaction with monetary policy measures and the role of an institutional arrangement.

Survey details

In the aftermath of the Global Financial Crisis of 2007–2009, national authorities worldwide gradually introduced a number of macroprudential policy measures aimed at mitigating the systemic risk of the financial cycle. In addition to the question of the real economic impact of increasing the stringency of bank regulation, many academic and policy practitioners have examined the potential interaction between macroprudential and monetary policy. However, the design of the institutional setup for macroprudential policy has received significantly less attention.

In view of the developments in the real economy before and after the Global Financial Crisis, a number of countries have begun to review their institutional frameworks to support the development of macroprudential policy. The review of institutional frameworks relates in particular to the question of whether it is desirable to have a separate macroprudential authority outside the central bank or whether it is more effective to have both institutions integrated "under one roof".

The decision on the institutional arrangement of macroprudential and monetary policy is crucial for the economy. Above all, it is a matter of ensuring that there is an exchange of information between the institutions concerned. Furthermore, it is necessary to minimize the potential negative effects of a trade-off between the coordination of given policies and the credibility of an institution with multiple (and sometimes conflicting) objectives. While policy coordination can improve outcomes, concentrating multiple objectives in one institution can complicate accountability and reduce credibility.

The results of this survey can be used to support the discussion on the costs and benefits of different institutional arrangements. It should be noted that the objective is not to identify the best institutional framework, as country specifics will always play an important role.