christian noyer : macroprudential policies – implementation and interactions introduction by mr christian noyer, governor of the bank of france and chairman of the board of directors of the bank for international settlements, before the bank of france ’ s financial stability review panel ( panel rsf ), new york, 14 april 2014. * * * dear governors, dear colleagues, ladies and gentlemen, i am very proud, today, to launch the 2014 issue of the banque de france ’ s financial stability review on “ macroprudential policies : implementation and interactions ”. since 2002, our review has brought together contributions from prominent academics, practitioners and policy - makers from all over the world on topical issues. this year, macroprudential policy has been one of the focuses of policy - thinking and policy - making and it is likely to be so for some time to come. i am sure that this issue of the banque de france ’ s fsr will provide food for thought and action. i warmly thank all the experts who have contributed to this review for their papers of exceptional quality and depth. i do not have time to mention all of them and only some authors are here with me today. these contributions are very diverse in their assessment and experiences of macroprudential policies. policy recommendations and proposals are sometimes difficult to reconcile but this is what we want to achieve in our fsr. naturally, we don ’ t necessarily share all the views expressed in all the articles, but we do believe in the exchange of ideas. as an introduction to this fsr, we are extremely thankful to the roundtable participants that have accepted my invitation : • a long - standing member of the federal reserve board : governor tarullo, thank you. it ’ s a privilege to welcome you today given your active participation and role in setting international financial regulation ; • a governor of one of the most advanced central bank in the area of macroprudential policy in asia : tae soo kang, deputy governor of the bank of korea, in charge of financial stability. • a very active ambassador for macroprudential policy : jose vinals, financial counselor and director of the monetary and capital markets department of the imf. • a distinguished expert on the financial sector worldwide and its regulation : douglas elliott from the brookings institution. thank you all for being with us today. as you know, for each issue of our fsr, we always try to pick topics that are both analytically complex and relevant to

may further subdue economic activity by causing a credit crunch for example. we would then enter into a negative feedback loop where the social and economic costs of regulation have systemic repercussions. there is thus a need under such circumstances for a clear prioritisation of macroprudential policy over microprudential policy in order to minimise the economic and social costs of the adopted measures and to guarantee the smooth financing of the economy, throughout the economic cycle. my second point is that this need for prioritisation must be addressed in a wider and clear governance framework of the interplay between macroprudential policies and other public policies. an optimal macroprudential policy framework must resolve such interaction issues by ensuring complementarity with monetary policy and consultation with fiscal policy. ( i ) first, macroprudential policy is complementary to monetary policy in so far as the two policies may reinforce or take over from each other, when one of them is constrained. for example, when monetary policy is at the zero lower bound, macroprudential policy can help to give the economy an additional policy impulse. macroprudential policy can also prevent the build - up of asset bubbles in specific sectors in a context of low interest rates. this complementarity should not however jeopardise the independence of central bank monetary policy decision - making. bis central bankers ’ speeches ( ii ) second, the optimal framework must promote consultation with fiscal authorities in order to ensure the full effectiveness of macroprudential policy measures that are often designed as pigouvian taxes generating resource transfers. this requires cooperation and information - sharing among the authorities involved in macroprudential policy decisions. such as many countries have already adopted, a collegiate macroprudential authority, with a clear division of responsibility between central banks, the ministry of finance, market authorities, and banking supervisors, can ensure this cooperation. i will not dwell further on these topical issues, which am sure will give rise to fascinating discussions. it is my hope that we can collectively contribute to enlighten this policy debate. let me now give the floor to our panellists. i suggest that we start with governor daniel tarullo, who will give us the vision of the united states on macroprudential issues. bis central bankers ’ speeches