Alexandre Lamfalussy and the origins of the BIS macro-prudential approach to financial stability
Among the international policy institutions, the Bank for International Settlements (BIS) is known for its sensitivity to financial stability issues. Typical for the BIS is a ï¿½macro-prudentialï¿½ approach. In this paper, it is argued that Alexandre Lamfalussy, who was at the BIS from 1976 to 1993, played a crucial role in shaping the BIS approach. Typical for Lamfalussy are a broad macroeconomic view and a focus on the systemically important institutions. In Lamfalussyï¿½s view, there is thus very much an overlap between the micro- and macro-prudential dimensions of financial stability. The main reasons for his sensitivity to financial fragility were: a ï¿½Keynesianï¿½ Weltanschauung (that a market economy is not sufficiently self-correcting), the emphasis of Dupriez (his teacher) on cycles, Lamfalussyï¿½s experience as a commercial banker, BIS involvement in financial stability issues, especially the Latin American debt crisis of 1982-83 and research on financial innovations.
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- Lamfalussy, Alexandre, 1985. "The Changing Environment of Central Bank Policy," American Economic Review, American Economic Association, vol. 75(2), pages 409-413, May.
- Bank for International Settlements, 1986. "Recent innovations in international banking (Cross Report)," CGFS Papers, Bank for International Settlements, number 01.
- William R. White, 2006. "Procyclicality in the financial system: do we need a new macrofinancial stabilisation framework?," BIS Working Papers 193, Bank for International Settlements.
- Stephen M. Goldfeld, 1976. "The Case of the Missing Money," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(3), pages 683-740.
- Claudio E. V. Borio & Gianni Toniolo, 2006. "One hundred and thirty years of central bank cooperation: a BIS perspective," BIS Working Papers 197, Bank for International Settlements.
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