##aessens ( 2014 ) for a comprehensive list of macroprudential tools and their uses across countries. see also kuttner and shim ( 2013 ), who find stronger effects of policies like loan - to - value and debt - to - income ratio caps on housing credit relative to policies targeted at banks ’ balance sheets and thereby loan supply. i am grateful to michael kiley of the fed for this insight. bis central bankers ’ speeches extent that not doing so would result in a worse outcome for current and future output and inflation. 15 there are some calculations – for example, by lars svensson – that suggest it would hardly ever make sense to deploy monetary policy to deal with potential financial instability. the contention that macroprudential measures would be a better approach is persuasive, except when there are no relevant macroprudential measures available. i believe we need more research into the question. i also struggle in trying to find consistency between the certainty that many have that higher interest rates would have prevented the global financial crisis and the view that the interest rate should not be used to deal with potential financial instabilities. perhaps that problem can be solved by seeking to distinguish between a situation in which the interest rate is not at its short - run natural rate and one in which asset - pricing problems are sector specific. of course, we should not exaggerate. it is one thing to say we have no macroprudential tools and another to say that having more macroprudential measures – particularly in the area of housing finance – could provide major financial stability benefits. it also seems likely that monetary policy should be used for macroprudential purposes with an eye to the tradeoffs between reduced financial imbalances, price stability, and maximum employment. in this regard, a number of recent research papers have begun to frame the issue in terms of such tradeoffs, although this is a new area that deserves further research. 16 it may also be fruitful for researchers to continue investigating the deployment of new or littleused monetary policy tools. for example, it is arguable that reserve requirements – a traditional monetary policy instrument – can be viewed as a macroprudential tool. in addition, some research has begun to ask important questions about the size and structure of monetary authority liabilities in fostering financial stability. 17 conclusion to sum up : the need for coordination across different regulators with distinct mandates creates challenges to the timely deployment of macroprudential measures in the

. securities and exchange commission, 2015b ). the proposal would require each of these funds to adopt a liquidity risk - management program, categorize the liquidity of every portfolio asset, set its own minimum share of “ three - day liquid assets, ” and disclose information about portfolio liquidity and the use of lines of credit and inter - fund lending. the proposal also would allow mutual funds to use “ swing pricing, ” a process of adjusting the net asset value of a fund ’ s shares to pass on to purchasing or redeeming investors more of the costs associated with their trading activity. the dodd - frank act requires that standardized swaps that previously traded in over - the - counter ( otc ) markets be cleared through central counterparties, and that large participants in standardized swap markets be subject to heightened regulation. these requirements are meant to address the vulnerabilities in the otc derivatives market that were highlighted by the 2008 financial crisis. the commodity futures trading commission ( cftc ) and the sec are tasked with implementing the dodd - frank act provisions by defining registration and businessconduct requirements that apply to the clearing organizations, to large participants in the swap market, and to data repositories. the sec and the cftc have finalized or initiated the rulemaking process for many of these regulations. for instance, the cftc issued the final rule on the registration of swap dealers and major swap participants in january 2012 ( commodity futures trading commission, 2012 ), while the sec issued the final rule on operational and risk - management requirements for clearing agencies in october 2012 ( u. s. securities and exchange commission, 2012 ). the list of reforms in this section of the speech is not comprehensive and omits important steps taken by the private sector. for example, supervisory and industry efforts have reduced the amount of intraday credit provided by the two large clearing banks ( jpmorgan chase and bank of new york mellon ), which should bis central bankers ’ speeches some challenges to macroprudential policy the steps taken since the crisis have almost certainly improved the resilience of the u. s. financial system, but i would like to highlight two significant challenges that remain. first, new regulations may lead to shifts in the institutional location of particular financial activities, which can potentially offset the expected effects of the regulatory reforms. the most significant changes in regulation have focused on large banks. this focus has been appropriate, as large banks are the most interconnected and complex institutions. nonetheless