Macroprudential policy instruments

Mitigating risks of a systemic nature and their impact is one of the core elements of macroprudential policy. The actual implementation of the policy involves relatively many areas. The most important part of policy implementation is the application of legislative instruments. This is a relatively strong form of response to the existence of risks.

Policy implementation, however, also includes other instruments and approaches, principally active communication toward the public and financial sector through the publication of reports, analyses, commentaries and recommendations. Other instruments may include initiatives for supervision, changes in NBS's internal processes, changes in collected data, etc.

Legislative macroprudential policy instruments are currently available in the banking sector. Most of the instruments are defined directly in the CRR Regulation and CRD IV Directive, which is implemented in Slovakia in the Banking Act. Legislative instruments include, in particular:

  • the capital conservation buffer
  • the countercyclical capital buffer
  • the systemic risk buffer
  • capital buffers for systemically important institutions
  • tightening of prudential requirements for credit institutions, such as level of own funds, risk weights on real estate loans, large exposure, liquidity, disclosure and exposures within financial sector.

More detailed information on macroprudential policy instruments can be found here.