Taming the Cycles of Finance?: Central Banks and the Macro-prudential Shift in Financial Regulation [Hardcover]

Post-crisis attempts to limit cyclical finance don't lead to major restraints, but rather a sustaining financial markets' expansion.Central banks act as systemic firefighters, quelling financial instability. This book traces post-crisis attempts to limit instability, turning central banks de facto into policemen. It details the massive investment of central bank economists to enable this preventive policy and shows administrative and political constraints limiting its effects.Central banks act as systemic firefighters, quelling financial instability. This book traces post-crisis attempts to limit instability, turning central banks de facto into policemen. It details the massive investment of central bank economists to enable this preventive policy and shows administrative and political constraints limiting its effects.Macroprudential regulation is a set of economic and policy tools that aim to mitigate risk in the financial and banking systems. It was largely developed in response to the financial crisis of 2007-08, turning central banks into de facto financial policemen. Taming the Cycles of Finance traces the post-crisis rise of macroprudential regulation and argues that, despite its original aims, it typically supports finance in times of crisis but fails to curb it in times of booms. Investigating how different macroprudential frameworks developed in the UK, the USA and the Eurozone, the book explains how central bank economists went about building early warning systems to identify fragilities in the financial system. It then shows how administrative and political constraints limited the effects of this shift, as central banks were wary of intervening in a discretionary manner and policymakers were opposed to measures to limit credit growth.1. Introduction; 2. The changing regulation of finance after the crisis: state of the art and beyond; 3. The evolution of systemic risk thinking pre-crisis: an expert network in the making; 4. The selective rise of macro-prudló%