A type of policy instrument that aims to contribute to the safeguarding of the stability of the financial system as a whole (i.e., at macro level). This involves its role as to monitor, advise and mitigate the build-up of systemic risks, mainly as a result of excessive credit growth and leverage, excessive maturity mismatch and market liquidity, direct and indirect exposure concentrations, misaligned incentives with a focus on moral hazard reduction, and boosting the resilience of financial infrastructures.

Macro-prudential instruments include the broad categories of capital-based measures, liquidity-based measures, borrower-based measures, among others. Within each category, there are certain subcategories such as capital requirements regulations (e.g., risk weights, capital conservative buffers, etc.) and directives (e.g., countercyclical capital buffers, systemic risk buffers), and specific financial ratios (e.g., leverage ratio), all within capital-based measures.

Liquidity-based measures, as part of capital requirement regulations, may include liquidity requirements, large exposure limits, etc. Other instruments within the category of liquidity-based measures are LTD ratio caps, non-stable funding levy, etc.

Borrower-based measures consist of ratio caps- e.g., LTV ratio caps, DTI ratio caps, LTI ratio caps, DSTI ratio caps.