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OeNB Macroprudential Policy Conference – Financial stability in 2030: Maintaining effectiveness while reducing regulatory complexity

Author

Listed:
  • Michaela Posch

    (Oesterreichische Nationalbank)

  • Stefan W. Schmitz

    (Oesterreichische Nationalbank)

Abstract

Regulatory complexity is becoming a concern and top priority for policymakers and the financial industry, both at the global and European level. The speed of the debate has gained pace very recently as the political pressure to deregulate has increased. In light of this, the Oesterreichische Nationalbank (OeNB) hosted a Macroprudential Policy Conference on May 9, 2019, where policymakers discussed the tradeoff between reducing the complexity of financial regulation and maintaining financial stability. At this one-day conference, high-level representatives from finance, politics and academia shed light on the drivers of complexity and explored ways to address them. In three panel discussions, the speakers drew on national and international experience with macroprudential policy to investigate what the future regulatory framework, one that also includes nonbank financial intermediaries, could and should look like. The main conclusion of the conference was a call for a high-level expert group at the EU level to explore the main sources of regulatory complexity and measures to reduce it. With less distortionary incentives for banks as well as effective macroprudential supervision and reliable resolution frameworks in place, supervisors should be able to put more emphasis on reducing the systemic costs of banks’ market exit. Less emphasis could be put on keeping all banks in business and regulatory complexity could be reduced without jeopardizing financial stability.

Suggested Citation

  • Michaela Posch & Stefan W. Schmitz, 2019. "OeNB Macroprudential Policy Conference – Financial stability in 2030: Maintaining effectiveness while reducing regulatory complexity," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 38, pages 87-94.
    • Handle: RePEc:onb:oenbfs:y:2019:i:38:b:5
    as

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    File URL: https://www.oenb.at/dam/jcr:2d64dbb6-90cf-4e45-a7ae-60e378fd7d17/09_FSR_38_OeNB_Macroprudential_Policy_Conference.pdf
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    References listed on IDEAS

    as
    1. Michaela Posch & Stefan W. Schmitz & Peter Strobl, 2018. "Strengthening the euro area by addressing flawed incentives in the financial system," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q2/18, pages 34-50.
    2. Gai, Prasanna & Kemp, Malcolm & Sánchez Serrano, Antonio & Schnabel, Isabel, 2019. "Regulatory complexity and the quest for robust regulation," Report of the Advisory Scientific Committee 8, European Systemic Risk Board.
    3. C.A.E. Goodhart, 2008. "The background to the 2007 financial crisis," International Economics and Economic Policy, Springer, vol. 4(4), pages 331-346, February.
    4. Michael Boss & Gerald Lederer & Naida Mujic & Markus Schwaiger, 2018. "Proportionality in banking regulation," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q2/18, pages 51-70.
    5. Aerdt Houben & Stefan W. Schmitz & Michael Wedow, 2015. "Systemic liquidity and macroprudential supervision," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 30, pages 85-92.
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    More about this item

    Keywords

    regulatory complexity; financial stability; macroprudential supervision;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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