ContentsIntroduction 1DavidAikmanandPrasannaGaiPART I THE OBJECTIVES OF MACROPRUDENTIAL POLICY1 In search of a macroprudential loss function 8RichardBarwell2 Making banking safe 27StephenG.CecchettiandKermitL.SchoenholtzPART II DEBT DYNAMICS AND FINANCIAL CRISES3 Aggregate debt servicing and the limit on private credit 54MathiasDrehmann,MikaelJuselius,andSarahQuincy4 The causes and consequences of high household indebtedness: evidence from Korea 81Hwan-KooKangandKyeongtaeLee5 The role of debt in financial crises: lessons from the past 93PedroDuarteNevesPART III EXPERIENCE WITH MACROPRUDENTIAL TOOLS6 Has macroprudential policy been effective? How can we know? 113ErlendW.Nier7 Housing and macroprudential policy 131JohnMuellbauer8 The effects of mortgage debt limits: lessons and questions from the Irish experience since 2015 178EdwardGaffney,NiamhHallissey,andFergalMcCann9 Macroprudential policy and capital flows 200MargaretDavenport,FilipaSá,andTomaszWieladek10 Distributional consequences of borrower-based macroprudential tools 220Jose-LuisPeydró FrancescRodriguez-Tous,JagdishTripathy,andArzuUlucPART IV USEFUL MODELS11 Outlook-at-risk 241Nina Boyarchenko12 Multiple equilibria? Don''t panic! - a hitchhiker''s guide to global games 260Kartik Anand and Philipp J. König13 Stress testing tools: where we stand and where to go? 295Claudio Barbieri, Grzegorz Halaj, and Christoffer Kok14 Towards a macroeconomic model of banking crises 318Daisuke Ikeda and Hidehiko Matsumoto15 Bank capital requirements and bank lending: from theory to empirics to policy 343Saleem Bahaj, Chiara Lattanzio, and Frederic MalherbePART V GOVERNANCE ARRANGEMENTS AND COORDINATION WITH OTHER MACROECONOMIC POLICIES16 Macroprudential governance: lessons from policies to mitigate housing market risks 369Ryan Banerjee and Philip Wooldridge17 Interaction of macroprudential and monetary policies: practice ahead of theory 384Thibaut Duprey, Yaz Terajima, and Jing YangPART VI SYSTEMIC RISK OUTSIDE THE BANKING SYSTEM18 Shadow banking 417Nathaniel Butler Blondel and Guillaume Plantin19 Macroprudential policy, monetary policy and non-bank financial intermediation 438Margherita Giuzio, Sujit Kapadia, Christoph Kaufmann, Manuela Storz, and Christian Weistroffer20 US life insurers and systemic risk 474Nathan Foley-Fisher, Nathan Heinrich, and Stéphane VeraniPART VII FRONTIER ISSUES21 Climate change, systemic risk, and macroprudential policy 499Paul Hiebert22 Climate risks in US housing and mortgage markets 513Toàn Phan23 Cryptocurrencies and decentralised finance: functions and financial stability implications 521Matteo Aquilina, Giulio Cornelli, Jon Frost, and Leonardo Gambacorta.