Macroprudential Policy Framework

A macroprudential policy framework is a set of strategies used by regulators to oversee and strengthen the entire financial system. Its goal is to prevent systemic risks—like financial crises—that can arise from excessive borrowing, risky lending, or interconnected institutions. By monitoring overall financial stability and applying tools such as setting capital requirements or controlling credit growth, these policies aim to ensure banks and markets remain resilient during economic ups and downs, protecting the economy and people’s savings from widespread instability.