Greece: Financial Sector Assessment Program-Technical Note on Macroprudential Policy Framework and Tools

This paper discusses a Technical Note on Macroprudential Policy Framework and Tools for the Greece Financial Sector Assessment Program. Overall Greece has been proactive and effective in its use of macroprudential policy, but interagency coordination should be formalized. Public accountability could be strengthened through an update of macroprudential strategy and more structured communication. The Systemic Stability Council should be fully operationalized as the national coordination platform on financial stability, including systemic risk. The risk surveillance framework has strengthened significantly but would benefit from enhanced analytics. The Bank of Greece (BoG) should closely monitor emerging pockets of vulnerability in the corporate and household sectors and remain ready to adjust its macroprudential toolkit as risks evolve. Additionally, The BoG should strengthen the quantitative foundations for calibrating the positive neutral countercyclical capital buffer to ensure the adequacy of releasable buffers. Any recalibration of the countercyclical capital buffer buffer should consider bank profitability and the availability of voluntary capital buffers.