The global financial crisis highlighted the need for national bank supervisory authorities to improve
surveillance systems and to detect early on the buildup of macroeconomic risks that could threaten
the entire financial system. This paper presents an empirical framework for analyzing how effective
macroprudential policies control credit growth, leverage growth, and housing price appreciation. Two
significant findings emerge. Broadly, macroprudential policies can indeed promote financial stability in
Asia. More specifically, different types of macroprudential policies are more effective against different
types of macroeconomic risks.