The primary objective of the macroprudential policy framework is to limit systemic risks in the financial system; thus contributing to the efficient provision of basic financial services and supportive to the real economy. Essentially, the policy encompasses systemic risk identification and assessment; selection and calibration of policy instruments; policy implementation and evaluation; and identification of policy leakages and arbitration, with a view of restoring the resilience and stability of the financial system. Instruments identified by the policy includes measures to minimise risks that could emanate from excessive credit growth and leverage; excessive maturity mismatches and market illiquidity; exposure concentrations; and moral hazards. The specific prescriptions, are in relation to, amongst others, loan to value, debt to income and debt service ratios. Furthermore, the framework consists of various recovery and management strategies.
