academic research still has a lot to do in terms of developing better models and establishing empirical facts. one contributing factor to the global financial crisis may even have been the scarcity of systemic risk elements in leading macroeconomic models used in policy work prior to the crisis. promisingly, that gap has now started to narrow. second, macroprudential analysis faces an imminent challenge in improving our understanding of the potential risks to financial stability involved in the current low interest rates environment and the use of unconventional monetary policy measures. for example, there are again potential risks related to “ searching for yield ” and the related migration of banking - like activities to the less regulated shadow banking sector. i will return to this below. concerning macroprudential policy instruments, the set of necessary tools for the banking sector is already at the disposal of competent authorities. on the other hand, we may lack sufficient tools to address potential systemic risks in the less regulated shadow banking sector. 3 high - quality analysis and a well - designed toolkit need to be complemented by the third element of successful macroprudential policy : a timely and forceful implementation of the appropriate policies. the implementation may be particularly challenging because of three types of implementation lags. see constancio, v. ( 2015 ) : “ macroprudential policy in europe : ensuring financial stability in a banking union ”, ecb speeches, 28 october. bis central bankers ’ speeches first, there is often a lag between the build - up of systemic risks and the observation of those risks, especially when the risks develop outside of the radar of supervision, as they have often done. second, macroprudential policymakers may not have the necessary tools to address the identified risks. in most countries, the available macroprudential tools and the limits on their use are given by the national legislation. usually, a lengthy legislative process is needed to add any new tools into the toolbox. third, similar to many other policies, there is a lag between the point of time at which some macroprudential measure is taken, and the time at which the measure will start to have an impact. a case study of macroprudential policy implementation : finland in the 1980 ’ s to illustrate the difficult challenges in macroprudential policy implementation, let me make a brief digression to the financial history of finland. the deregulation of the finnish financial markets took place in 1986 and even before. in the spring of 1987 i became

##ing the transmission of monetary policy in the euro area? focusing on bank capital, there is ample evidence suggesting that a solid banking sector is a key to unimpeded credit flows. banks struggling with debt overhang or non - performing loans lend less. in accordance with this, experience strongly suggests that a swift recapitalisation of the banking sector in response to crises is a key measure to restore economic growth. so, the regulatory measures we have taken after the crisis, and their implementation must be done properly. this is the so - called amara´s law, named after the futurologist roy amara. bis central bankers ’ speeches