Money creation no longer comes from lending, but from central bank purchases of securities. This makes the usual macroprudential policies ineffective

Since the subprime crisis, money creation in OECD countries has come primarily from central bank operations (purchases of securities under quantitative easing) and not from lending by banks. The prudential problem is therefore no longer, on average, excessive debt, but excessive rises in asset prices linked to excess money creation by central banks. This means that macroprudential policies that are focused on bank behaviour (capital ratios, liquidity ratios, loan-to-value ratios, etc.) have become completely ineffective. On the other hand, it would probably be effective to use taxation of short-term capital gains to limit the effect of money creation - if it is to be continued - on asset prices.