18  All speeches are available online at www.bankofengland.co.uk/news/speeches  18  Holston, K., T. Laubach and J.C. Williams (2017), Measuring the natural rate of interest: International trends and determinants, Journal of International Economics, vol. 108(S1), pp. 59-75. International Monetary Fund (2017), Global Financial Stability Report: Is Growth At Risk?, October 2017. King, M. and D. Low (2014), Measuring the “world" real interest rate, NBER Working Paper. Kovacs, A., M. Rostom and P. Bunn (2018), Consumption response to aggregate shocks and the role of leverage, Discussion Paper 1820, Centre for Macroeconomics (CFM). Potter, S., F. Smets et al (2019), Unconventional monetary policy tools: A cross-country analysis, CGFS Paper no. 63, Bank for International Settlements. Rachel, L. and T. D. Smith (2017), Are low real interest rates here to stay?, International Journal of Central Banking, Vol. 13 (3), pp. 1-42. Rule, D. (2019), An annuity is a very serious business: Part Two, Speech at the Westminster and City Bulk Annuities Conference. Schularick, M. and A. Taylor (2012), Credit booms gone bust: Monetary policy, leverage cycles and financial crises, 1870-2008, American Economic Review, Vol. 102(2), pp. 1029-61. Sushko, V. and G. Turner (2018), The implications of passive investing for securities markets, BIS Quarterly Review. Vlieghe, Gertjan (2017), Real interest rates and risk, Speech at the Society of Business Economists' Annual conference, London. Wilkins, C. (2018), Choosing the best monetary policy framework for Canada, Remarks at McGill University Max Bell School of Public Policy. 19  All speeches are available online at www.bankofengland.co.uk/news/speeches  19

On the one hand, aiming at containing systemic risk might be phrased in too vague terms; on the other hand, the specification of explicit (quantitative) targets might be inappropriate. Some experiences in introducing prudential policy instruments in the past seem to suggest that while these were congruent with micro-prudential policy objectives, the macro-prudential dimension may be missing in their design or calibration. 2. Further consideration also needs to be given to enhancing the understanding of macro-prudential policy transmission channels. The task of understanding transmission channels and assessing the potential impact of measures poses a number of challenges. For instance, it needs to take account of substitutability and competition between institution and market-based sources of credit. As such, the choice of the appropriate policy instruments may depend on country-specific factors such as the structure and features of the financial system. A better understanding of the transmission channels of macro prudential policy is critical, also on account of possible interaction with other policy areas, in particular with monetary policy. 3. Consideration also needs to be given to the potential for regulatory arbitrage. Pursuing macro-prudential policy action is likely to require a great degree of international coordination, in order to keep the scope for cross-border and crosssector arbitrage contained. This aspect is particularly important within the European Union (EU) which is characterised, among other things, by a high degree of policy harmonisation in the financial sector. 4.