Macroprudential regulation is the activity of the state aimed at increasing sustainability of financial institutes and decreasing systemic risks that can influence the ability of the whole financial system to fulfill its functions in a proper way.
Macroprudential regulation is implemented by means of monitoring of systemic risks, raking measures with the aim of their constraining.
The final aim of macroprudential regulation is the limiting of financial risks; the two key aims – increasing sustainability of financial sector and smoothing the amplitude of financial cycles in the economy. The scope of macroprudential regulation covers all the main elements compiling the financial system: financial intermediaries, financial markets and financial infrastructure.
With the purpose of attaining aims of macroprudential regulation, National Bank meets the common global practice and uses the set of macroprudential instruments that differ from the measures of monetary policy and banking supervision, though they are closely related to the latter. The basic macroprudential instruments of the National Bank are:
countercyclical buffer that enforces all the acting banks to create additional capital stock during the periods of the highest exposure to credit risk;
systemic importance buffer that forms higher level of capitalization for banks that are important from the point of view of the overall financial system stability;
instruments for limiting households indebtedness hampering the accumulation of the excessive credit burden of the population;
estimated values of the standard risk established for banks that implement business models with the high risk appetite, increased contributions to the required reserves fund, increased requirements to the capital and to the formation of special provisions.