since macroprudential policy measures have been in place for a relatively short period of time compared to other macroeconomic policies, however, their effects need further verification. while hong kong, brazil and turkey have introduced macroprudential policies or strengthened related regulations in the wake of the global financial crisis, it is too early to decide on their effectiveness. bis central bankers ’ speeches macroprudential policies should capture potential systemic risk factors before financial instability gets out of control and turns into a crisis and be applied preemptively. what is most important is to determine the appropriate timing of their application. in addition, since the development of indicators designed to determine the choice and settings of these macroprudential policy tools is still at an early stage and the data on the basis of which they are determined is insufficient, the conduct of policy should be based on more abundant and sophisticated micro data when implementing policies. macroprudential policy instruments are normally applied in the form of regulations on financial institutions. as the pursuit of regulatory arbitrage by financial institutions including the use of shadow banking could undermine the policy effects, we need responses to deal with this. it has been assumed so far that macroprudential policy measures will be used mostly during economic expansion. we should be however mindful of asymmetry as well which rather accelerates procyclicality or weakens regulatory effects during economic downturn. harmonious operation between monetary and macroprudential policies as mentioned earlier, countries around the world do not yet have enough experience with implementation of macroprudential policies and systemetic risk indicators measuring the degree of financial uncertainty are still under development. against this backdrop, it would be difficult to expect satisfying synergy effects from the mutual complementarity of macroprudential and monetary policies. if the effects of the two policies overlap or are in conflict and they are not operated harmoniously, this may give rise to the problem of excessive or offsetting policy effects, as they both work by way of changes in financial institutions ’ balance sheets. if macroprudential policy works smoothly toward the targeted objectives at an opportune time, however, it can form a mutually complementary relationship with monetary policy and thus maximize social welfare through price stability and financial stability, as suggested by stijn claessens and others of the imf. this view claims that, as we can see from the experience of the financial crisis, it is possible to respond to the accumulation of financial imbalances

consequently regulatory measures have been put in place to prevent crisis recurrence, but it is still hard to say for sure that there are no more crises to come. in order to prevent the eruption of a further crisis, we should prepare for a new, unpredictable crisis rather than looking back at the previous ones, and in this respect, we should make sure that the regulatory reforms not just reflect lessons from previous crises but preemptively identify potential factors triggering a crisis and prevent their occurrence. organizations carrying out macro - prudential policies need to have the abilities of a prophet to monitor on a constant basis and identify preemptively all the economic and social factors that could possibly give rise to systemic risks. this being the case, the policy authorities must be imbued with a sense of mission to shoulder the great national responsibilities that they bear. thank you for listening so attentively and i hope that what we have discussed today will give us a clue how to cope with the challenges we have in front of us. references kim, choongsoo, “ monetary policy after global financial crisis ( in korean ), ” 2013 economics joint conference, feb. 2013 adrian, t. and h. s. shin, “ financial intermediaries, financial stability, and monetary policy, ” frb ny staff report no. 346, 2008. blanchard, o., g. dell ’ ariccia and p. mauro, “ rethinking macroeconomic policy, ” imf staff position note, 2010. c. a. e. goodhart, “ the changing role of central banks, ” presentation at the 9th bis annual conference, lucerne, jun. 24, 2010. erlend w. nier, jacek osiski, luis i. jcome, and pamela madrid, “ towards effective macroprudential policy frameworks : an assessment of stylized institutional models, ” imf working paper no. 250, 2011. h. s. shin, “ imf financial stability & systemic risk forum, ” mar. 2013. itai agur and sunil sharma, “ rules, discretion, and macro - prudential policy, ” imf working paper no. 65, 2013. reinhart, c. m. and k. rogoff, “ shifting mandates : the federal reserve ’ s first centennial, ” presentation at the aea meetings, san diego, jan. 3, 2013. stijn claessens,