Macroprudential policy

In addition to setting the objective of price stability, the Act on the CNB lays down that the CNB shall set macroprudential policy by identifying, monitoring and assessing risks jeopardising the stability of the financial system and, in order to prevent or mitigate these risks, contribute by means of its powers to the resilience of the financial system and the maintenance of financial stability. On the practical level, macroprudential policy can be defined as the application of a set of instruments whose aim is to reduce the vulnerability (or increase the resilience) of the financial system by containing the risks that individual financial institutions or the links between them may create for the system as a whole.

The macroprudential policy tools applied in the Czech Republic:

• The countercyclical capital buffer
• The systemic risk buffer
• The capital conservation buffer
• Recommendation on the management of risks associated with the provision of retail loans secured by residential property
  
• List of other systemically important institutions
• Mutual recognition of macroprudential measures (reciprocity)

Intermediate objectives and tools of macroprudential policy:

In line with the ESRB Recommendation (external link), the Czech National Bank chooses appropriate macroprudential tools on the basis of intermediate objectives reflecting the existence of several sources of systemic risks and their own transmission mechanisms.

• Objectives of macroprudential policy
• Sources of systemic risk, transmission mechanisms and macroprudential instruments

Stance of the CNB on international initiatives in the area of macroprudential policy and financial stability:

• The CNB’s reply to the European Commission’s public consultation on the preparation of a revised framework for macroprudential policy in the EU (pdf, 320 kB) – 10 August 2018
• The CNB’s comments on the BCBS discussion paper on the regulatory treatment of sovereign exposures (pdf, 246 kB) – 9 March 2018