Macroprudential policy: The neglected sectors

The objective of macroprudential regulation is to reduce the risk and economic costs of financial instability. To date, most attention has been paid to the banking sector. This chapter focuses on insurance and funded pensions to discuss the feedback mechanisms and trade-offs embedded in macroprudential policies. Given their importance for financial stability, the macroprudential policy framework needs to assess the effect of prudential rules for insurers and pensions on aggregate spending (GDP).