Macroprudential regulation and financial stability High-Level - PowerPoint PPT Presentation

Macroprudential regulation and financial stability High-Level International Forum 1 November 2019, Minsk Vitas Vasiliauskas Chairman of the Board Bank of Lithuania 1

Macropru gaining prominence internationally Number of economies that have used macroprudential policy 100 Advanced Economies 90 Emerging Market and Developing Economies 80 70 60 50 40 30 20 10 0 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2 Source: IMF

Institutional shifts at the European level Differently from pre-crisis years, macroprudential Comprehensive governance structure was set up authorities are now mainstream in the EU National authorities adopt macroprudential measures European Central Bank assesses the measures and if necessary applies higher requirements European Systemic Risk Board carries out oversight and issues recommendations for all EU member states and institutions

Lithuania: pro-active policy stance Bank of Lithuania macroprudential toolkit developments Announced counter-cyclical capital buffer rate in Lithuania (effective in a year after being set) 2011 Restrictions on loan-to-value ratio 1 0,9 2011 Restrictions on debt-service-to-income ratio 0,8 0,7 2011 Restrictions on loan maturity 0,6 0,5 Further limit on debt-service-to-income 2015 (introduction of interest rate shock element) 0,4 0,3 Reduction of loan maturity limit 2015 0,2 Introduction of counter-cyclical capital buffer rate 2015 0,1 0 Introduction of domestic systemically important 2015 2016 2017 2018 2019 2015 banks‘ capital buffer

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