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Daniel K. Tarullo, Macroprudential Regulation, 31 Yale J. Reg. 505 (2014).


Abstract: Real world crises have a way of shaking up the intellectual foundations of policy disciplines. Some ideas, such as the efficient markets hypothesis, have taken some hits, as others have risen to prominence. An example of the latter is the view that financial stability must be an explicit economic policy goal. A corollary of this view is that a "macroprudential" perspective -- generally characterized as focused on the financial system as a whole as opposed to the well-being of individual firms -- should be added to traditional prudential regulation. A macroprudential reorientation of the bank regulatory policies will require a range of continuing work on resiliency, on other structural measures, and on the effective blending of macroprudential with traditional microprudential regulatory and supervisory policies. But, even as you make more progress in these areas, your efforts will not be complete without measures addressing what the author has termed an accelerant of systemic problems.