Financial Policy Committee

Definition ∞ A Financial Policy Committee is a body responsible for identifying and addressing risks to the stability of a nation’s financial system. Typically part of a central bank, this committee monitors macroprudential risks, such as excessive credit growth or asset price bubbles, and recommends measures to mitigate them. Its mandate extends to safeguarding the financial system from shocks and ensuring its resilience. The committee’s decisions influence broader economic stability and regulatory direction.
Context ∞ The role of Financial Policy Committees is expanding to consider the potential systemic risks and opportunities presented by digital assets. Discussions often center on how cryptocurrencies and decentralized finance might impact traditional financial stability and consumer protection. These committees are actively assessing the need for new regulatory tools and frameworks to oversee this rapidly evolving sector, aiming to integrate digital asset considerations into broader financial stability assessments.