Andrew Haldane, the executive director for financial stability at the Bank of England, on Saturday said the nature of credit crises warranted macroprudential policy.

Addressing an audience at Columbia University, New York, Haldane presented a model that showed how credit cycles arise from a collective action failure among banks. "The lending decisions banks take, while individually rational, are collectively suboptimal," Haldane said. "Individual banks may fail to internalise the reputational