Macro-Prudential Policies to Mitigate Systemic Risk: An International Overview

In the wake of the global financial crisis, a clear awareness has emerged that systemic risk can only be addressed and managed through macro-prudential policies. Many countries have embarked on new reforms of the financial regulatory system with macro-prudential mechanisms, technical standards and instruments aimed at mitigating systemic risk. The main purpose of this essay is to summarise the main reforms in Europe, the United States, China, Islamic countries and Japan and to explain how these reforms fit together. In addition, through a comparative analysis of regulatory structures, we assess the effectiveness of macro-prudential tools in preventing and mitigating potential systemic risks and safeguarding financial stability. The results show a growing and widespread focus on prudential policies and architectures to mitigate systemic risk, although the different economies analysed start from very different positions.