Macroprudential Regulation

Macroprudential regulation refers to policies and measures aimed at ensuring the stability of the financial system as a whole, rather than just focusing on individual institutions. It addresses systemic risks that can arise from interconnectedness among financial entities and fluctuations in the economy. By monitoring and managing factors like excessive lending, asset bubbles, and credit cycles, these regulations help prevent financial crises, protect consumers, and promote a healthy economy. Essentially, they act as safeguards to maintain the overall health of financial markets, thereby protecting citizens and businesses from economic downturns.