Within central banks everyone these days is in love with macroprudential policy. Since macroprudential is synonymous with something good – akin to education and justice – central bankers will term whatever action they are taking as macroprudential.

Emerging markets reckon capital controls and managed currencies are macroprudential policy. I can imagine trade barriers could likewise be described as such. And in advanced economies, any restrictions on banks – good or bad – achieve less scrutiny if they are described as macroprudential policies. Read more