The recent financial crisis has highlighted the need to go beyond a purely micro approach to financial regulation and supervision. In recent months, the number of policy speeches, research papers and conferences that discuss a macro perspective on financial regulation has grown considerably. The policy debate is focusing in particular on macroprudential tools and their usage, their relationship with monetary policy, their implementation and their effectiveness. Macroprudential policy has recently also attracted considerable attention among researchers. This paper provides an overview of research on this topic. We also identify important future research questions that emerge from both the literature and the current policy debate.JEL classification: E58, G28.Key words: Macroprudential policy. 1The views expressed are those of the authors and should not be taken to reflect those of the BIS or De Nederlandsche Bank. We would like to thank Itai Agur, Bill Allen, Claudio Borio, Maria Demertzis, Marvin Goodfriend, Pierre Lafourcade, Iman van Lelyveld, Kasper Roszbach, Philip Turner and Haibin Zhu for helpful comments and discussions, and Bruce Bowlin for excellent research assistance. The authors' email addresses are e.b.g.galati@dnb.nl and richhild.moessner@bis.org.

Abstract. Various types of expansions in series of Chebyshev-Hermite polynomials currently used in astrophysics for weakly non-normal distributions are compared, namely the Gram-Charlier, Gauss-Hermite and Edgeworth expansions. It is shown that the Gram-Charlier series is most suspect because of its poor convergence properties. The Gauss-Hermite expansion is better but it has no intrinsic measure of accuracy. The best results are achieved with the asymptotic Edgeworth expansion. We draw attention to the form of this expansion found by Petrov for arbitrary order of the asymptotic parameter and present a simple algorithm realizing Petrov's prescription for the Edgeworth expansion. The results are illustrated by examples similar to the problems arising when fitting spectral line profiles of galaxies, supernovae, or other stars, and for the case of approximating the probability distribution of peculiar velocities in the cosmic string model of structure formation.

The literature on the effectiveness of macroprudential policy tools is still in its infancy and has so far provided only limited guidance for policy decisions. In recent years, however, increasing efforts have been made to fill this gap. Progress has been made in embedding macroprudential policy in theoretical models. There is increasing empirical work on the effect of some macroprudential tools on a range of target variables, such as quantities and prices of credit, asset prices, and on the amplitude of the financial cycle and financial stability. In this paper we provide a critical review of recent progress in theoretical and empirical research on the effectiveness of macroprudential instruments.

This publication is available on the BIS website (www.bis.org). AbstractCentral bank communication has changed dramatically over the past decade, with some central banks providing guidance about or explicit forecasts of likely future policy rates. One frequently made argument against the provision by central banks of such guidance or forecasts is that it runs the risk of impairing market functioning. In this paper, we evaluate the behaviour of financial markets in the United States, the euro area and New Zealand in light of the communication strategies of central banks, in order to assess whether the provision of policy rate guidance by central banks impairs market functioning. While we find evidence that central bank policy rate forecasts influence market prices in New Zealand, we find no evidence that such guidance or forecasts impair market functioning in the United States, the euro area or New Zealand. The results suggest that the risk of impairing market functioning is not a strong argument against central banks' provision of policy rate guidance or forecasts.JEL classification: E52, E58, G14.

The recent financial crisis has highlighted the need to go beyond a purely micro approach to financial regulation and supervision. In recent months, the number of policy speeches, research papers and conferences that discuss a macro perspective on financial regulation has grown considerably. The policy debate is focusing in particular on macroprudential tools and their usage, their relationship with monetary policy, their implementation and their effectiveness. Macroprudential policy has recently also attracted considerable attention among researchers. This paper provides an overview of research on this topic. We also identify important future research questions that emerge from both the literature and the current policy debate.JEL classification: E58, G28.Key words: Macroprudential policy. 1The views expressed are those of the authors and should not be taken to reflect those of the BIS or De Nederlandsche Bank. We would like to thank Itai Agur, Bill Allen, Claudio Borio, Maria Demertzis, Marvin Goodfriend, Pierre Lafourcade, Iman van Lelyveld, Kasper Roszbach, Philip Turner and Haibin Zhu for helpful comments and discussions, and Bruce Bowlin for excellent research assistance. The authors' email addresses are e.b.g.galati@dnb.nl and richhild.moessner@bis.org.

The angular cross‐correlation between two galaxy samples separated in redshift is shown to be a useful measure of weak lensing by large‐scale structure. Angular correlations in faint galaxies arise as a result of spatial clustering of the galaxies as well as gravitational lensing by dark matter along the line of sight. The lensing contribution to the two‐point autocorrelation function is typically small compared with the gravitational clustering. However, the cross‐correlation between two galaxy samples is almost unaffected by gravitational clustering provided that their redshift distributions do not overlap. The cross‐correlation is then induced by magnification bias resulting from lensing by large‐scale structure. We compute the expected amplitude of the cross‐correlation for popular theoretical models of structure formation. For two populations with mean redshifts of ≃0.3 and 1, we find a cross‐correlation signal of ≃1 per cent on arcmin scales and ≃3 per cent on scales of a few arcsec. The dependence on the cosmological parameters Ω and Λ, the dark matter power spectrum and the bias factor of the foreground galaxy population is explored.

Using an analytical model for the string network we show that the kurtosis of cosmic microwave background (CMB) temperature gradient maps is a good statistic to distinguish between the cosmic string model and inflationary models of structure formation. The difference between the stringy and inflationary value for the kurtosis is inversely proportional to the angular resolution and to the number of strings per Hubble volume of the strings' scaling solution. If strings are indeed responsible for CMB anisotropies then experiments with resolutions of a couple of arcminutes or smaller could determine it using this statistic.

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