Macroprudential Policy Tools: 'State of the Art' in Italy in view of the ESRB Report 'A Review of Macro-Prudential Policy in the EU One Year After the Introduction of the CRD/CRR'

Abstract

The newly-issued ESRB report A review of macro-prudential policy in the EU one year after the introduction of the CRD/CRR aims at offering a broad overview upon the macroprudential measures so far implemented in the EU countries, either on a standalone basis or as implementation of the provisions laid down in the CRR/CRD IV package. By referring to the ESRB report, this short article seeks to scrutinize the current State of the Art of macroprudential policy in Italy. In doing so, we seek to explore the different institutional and economic reasons that seem to justify the Italian legislator in maintaining a limited macroprudential framework. Although this regulatory choice may appear reasonable today, we point out that the benefits for Italian credit institutions - and for the overall economy - relative to the non-application of stronger macroprudential instruments might be outweighed by the costs of future financial shocks.