The Changing Role of Macroprudential Policy in Austria after World War II
Döme, S., S. W. Schmitz, K. Steiner, E. Ubl (2016) "The Changing Role of Macroprudential Policy in Austria after World War II", Two Hundred Years of Central Banking in Austria: selected topics. Monetary Policy and the Economy Q3-4/16, 163-189
27 Pages Posted: 16 May 2017
Date Written: September 5, 2016
The need for and implementation of macroprudential supervision was a key lesson from the global financial crisis of 2008. However, historical protocols, legislation, policy agreements as well as the literature bear witness of a longer history of macroprudential policy in Austria: it predates the crisis by about 60 years during which it gradually evolved. We argue that careful analysis of this history provides interesting insights for current policymakers. We identify the following key lessons from analyzing the changing legal nature, motivation and effectiveness of macroprudential policy in Austria: first, macroprudential policy requires a sound legal basis; second, measures have to be quite intrusive to effectively curtail the build-up of systemic risk. Less intrusive measures become effective above all by increasing the shock-absorbing capacity of the financial system, once sytemic risks materialize.
Keywords: History of Austrian macroprudential policy, credit control agreements
JEL Classification: E50, E60, G20, N24
Suggested Citation: Suggested Citation