These policies, which are called macroprudential policies, are especially important when it’s desirable to differentiate entities—e.g., when it is desirable to restrict credit to an overly indebted area while simultaneously stimulating the rest of the economy, or when its desirable to provide credit to some targeted entities but not provide it broadly. Macroprudential policies take numerous forms that are valuable in different ways in all seven stages of the big debt cycle.
