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The changing role of macroprudential policy in Austria after World War II

Author

Listed:
  • Sophia Döme
  • Stefan W. Schmitz

    (Oesterreichische Nationalbank)

  • Katharina Steiner

    (Oesterreichische Nationalbank, Foreign Research Division)

  • Eva Ubl

    (Oesterreichische Nationalbank, Financial Markets Analysis and Surveillance Division)

Abstract

The need for and implementation of macroprudential supervision was a key lesson from the global financial crisis of 2008. However, historical protocols, legislation, policy agreements as well as the literature bear witness of a longer history of macroprudential policy in Austria: it predates the crisis by about 60 years during which it gradually evolved. We argue that careful analysis of this history provides interesting insights for current policymakers. We identify the following key lessons from analyzing the changing legal nature, motivation and effectiveness of macroprudential policy in Austria: first, macroprudential policy requires a sound legal basis; second, measures have to be quite intrusive to effectively curtail the build-up of systemic risk. Less intrusive measures become effective above all by increasing the shock-absorbing capacity of the financial system, once systemic risks materialize.

Suggested Citation

  • Sophia Döme & Stefan W. Schmitz & Katharina Steiner & Eva Ubl, 2016. "The changing role of macroprudential policy in Austria after World War II," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 163-189.
    • Handle: RePEc:onb:oenbmp:y:2016:i:3:b:8
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    References listed on IDEAS

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    Cited by:

    1. Michaela Posch & Stefan W. Schmitz & Katharina Steiner & Eva Ubl, 2019. "The case for macroprudential policy as a stabilizing tool for the euro area," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q1-Q2/19, pages 124-138.
    2. Andreas Greiner & Katharina Steiner & Walter Waschiczek, 2019. "The recent upswing in corporate loan growth in Austria – a first risk assessment," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 38, pages 56-73.
    3. Michael Sigmund, 2021. "Assessing macro-prudential policies: the case of FX lending," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 45(2), pages 316-359, April.
    4. Stefan W. Schmitz, 2016. "The OeNB’s reaction to the end of the Bretton Woods system: tracing the roots of the Indicator," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 190-210.

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    More about this item

    Keywords

    history of Austrian macroprudential policy; credit control agreements; minimum liquidity requirements; Limes; Kreditplafond; capital buffers;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-

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