The recent ﬁnancial crisis and its impact on the global economy led the analysis and policies conducted so far for ﬁnancial stability to be questioned. In this context, there is a general agreement that risks related to excessive ﬁnancial leverage and to signs of speculative bubbles were largely neglected in the period prior to the crisis. This fact has motivated a profound reform in ﬁnancial regulation and supervision at the international level, aimed at promoting a more efﬁcient identiﬁcation and prevention of risks and of the various channels that facilitate their propagation. Macro-prudential policy, aimed at preventing and mitigating systemic risk, has a prominent role in these reforms. In this context, several countries have been developing methodologies and an institutional framework appropriate to the implementation of macro-prudential policy. In several countries, including Portugal, this function has been attributed to the central bank. This article analyses the role of macro-prudential policy in the new policy framework for ﬁnancial stability and the challenges related to its implementation.
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