After the global financial crisis, it is now widely recognized that in addition to established microprudential policies, the stability of the financial sector requires the adoption of macroprudential policies. A number of countries have thus reviewed their institutional frameworks for financial stability so as to support the development of a macroprudential policy function. But significant cross-country variation has emerged as to the role the central banks should play in the institutional set-up entrusted with the responsibility of financial stability. Why are some countries bestowing the macro-prudential mandate on the central bank? Why are other countries allocating macroprudential responsibilities among different regulatory agencies by establishing ad hoc policy committees? This paper addresses these questions by drawing attention to the pre-crisis arrangements for monetary and supervisory policy combined with domestic perceptions of regulatory failures brought to the surface by the crisis. These arguments are illustrated based on an examination of the macroprudential institutional set-up in the European Union (e.g. the European Systemic Risk Board), the United Kingdom (e.g. the Financial Policy Committee) and the United States (e.g. the Financial Stability Oversight Council)
