Under Article 55A of its Statute, the Bank of Greece “shall exercise, inter alia, its macroprudential tasks with a view to strengthening the resilience of the financial system and decreasing the build-up of systemic risks. In particular, the Bank shall identify, monitor and assess such risks and adopt the measures provided for by law”.
The ultimate objective of the macroprudential policy of the Bank of Greece (macroprudential mandate) is to contribute to safeguarding the stability of the financial system as a whole, by strengthening its resilience and reducing the build-up of systemic risks, thereby ensuring the financial sector's sustainable contribution to economic growth.
In pursuing the ultimate objective of macroprudential policy, the Bank of Greece seeks to achieve intermediate objectives, relating to the national financial system as a whole. According to Recommendation ESRB/2013/1 the intermediate objectives are defined as operational specifications of the ultimate objective of macroprudential policy and include:
- ensuring an appropriate level of credit growth and leverage, including preventing and mitigating any excessive credit growth and leverage;
- preventing and mitigating excessive maturity mismatch and market illiquidity;
- limiting direct and indirect exposure concentrations;
- limiting the systemic impact of misaligned incentives with a view to reducing moral hazard;
- strengthening the resilience of financial infrastructures.