Macroprudential Oversight refers to regulatory supervision aimed at mitigating risks that could threaten the stability of the entire financial system. This approach focuses on the system as a whole, rather than individual institutions, to prevent widespread financial distress. It involves tools like capital buffers and lending limits to safeguard against systemic vulnerabilities. Such oversight seeks to maintain financial resilience against broad economic shocks.
Context
With the growth of digital assets, macroprudential oversight is increasingly applied to assess potential risks posed by large-scale cryptocurrency markets and stablecoins. News often reports on central banks and financial stability boards evaluating the systemic implications of these assets. This scrutiny aims to ensure that the expansion of the digital economy does not introduce new vulnerabilities to the established financial system.
The ESRB report signals a decisive EU pivot from micro-level conduct oversight to systemic risk management, forcing CASPs to immediately de-list non-MiCA stablecoins.
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