A Comparative Analysis of Macroprudential Policy across Euro Area Candidate Countries

Abstract

Concerns to setting an appropriate overall macroprudential policy framework have taken shape at local, regional, and global level since the onset of the global financial crisis. At regional level, a particular case is that of the European Union, given the national-supranational relationship specific to this economic region. The article aims to identify the macroprudential policy condition of the Euro Area candidate countries, by using an index built on some criteria that describe on the one hand, the capacity of macroprudential policy governance and the “activism” of macroprudential authority, and, on the other hand, the degree of compliance with the European Systemic Risk Board (ESRB) recommendations for national macroprudential authorities, given that the countries under review are member states of the European Union. Our findings show that the Euro Area candidate countries have quite different macroprudential policy features, both in terms of its governance and in terms of the “convergence” towards ESRB recommendations. Although the analysis should be extended by adding other relevant criteria, we can assert that it offers an overview of the potential role of the national macroprudential policy as a shock-absorber instrument in the perspective of a future accession to the Euro Area.