Intermediate objectives of macroprudential policy

The key objectives of macroprudential policy include:

  1. to limit systemic risks associated with excessive credit growth and leverage;
  2. to mitigate and prevent excessive maturity mismatch and market illiquidity;
  3. to limit direct and indirect exposure concentrations;
  4. to limit the systemic impact of misaligned incentives with a view to reducing moral hazard;
  5. strengthen the resilience of financial infrastructures.

Macroprudential policy instruments include macroprudential capital buffers for banks that have become part of the EU regulatory framework due to the implementation of the CRD IV/CRR package. In addition to capital buffers, the CNB has at its disposal a set of other tools focused on specific and sectoral risks. If it identifies systemic risks, the CNB can apply some of these tools again on the basis of CRD IV/CRR and others on the basis of ESRB recommendations (external link). The prerequisites of macroprudential policy tools are described in detail in the ESRB Handbook on Operationalising Macro-prudential Policy in the Banking Sector (external link).