¹Firas Barakat, ²Dr. Oroubah A. R. Mahmoud

¹Department of Accounting, Faculty of Economics and Business Al-Quds University, Jerusalem, Palestine

²Department of Banking & Finance, Faculty of Economics and Business Al-Quds University, Jerusalem, Palestine

The primary objective of macro prudential policy is to contain systemic risks or large-scale financial instability . Therefore, the systemic risk can definition will be as “the risk that financial instability will spread on a large scale and lead to impeding the functioning of the financial system to an extent that affects growth and welfare.”

Achieving overall safety in the financial sector of any country may conflict in one way or another with the goals of economic development, or as a least, it might contradict some of those goals in that country. Macro prudential efforts to mitigate systemic risks include a series of policy interventions in the financial and credit markets, as well as a variety of countercyclical stabilization techniques designed to influence price formation, credit flows, and direct investment from the domestic economy to other regions outside this economy. Adequately tested so far.

1) On the interaction between monetary and macroprudential policies European Central Bank, Working Paper Series, February 2021.

2) Effects of macroprudential policies on macroeconomic performance, BIS Quarterly Review, September 2017.

3) Political Economy and the Paradoxes of Macroprudential Regulation. The University of Sheffield 2017

4) Financial Development, Growth, and Crisis, NATIONAL BUREAU OF ECONOMIC RESEARCH, Working Paper 24474, Cambridge, MA 02138 April 2018.

5) Macroprudential Policies, Economic Growth, and Banking Crises. International Monetary Fund, March 2020.

6) An Overview of Macroprudential Policy Tools, Division of International Finance, Board of Governors of the Federal Reserve System, Washington, DC 20551.

7) Asset prices, investment, credit and financial vulnerability. An analysis using quarterly figures

8) Magdalena D. Riiser, Macroprudential Department, Norges Bank Financial Stability

9) BIS (2010): Guidance for national authorities operating the countercyclical capital buffer

Volume 05 Issue 04 APRIL 2022

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