The domestic sources of macroprudential policy divergence : financial regulation and the politics of housing in Germany and the UK

What role do domestic institutional and structural factors play in the emergence of national macroprudential regimes? So far, the literature on macroprudential policy has mainly focused on transnational processes of knowledge production. We therefore still know very little about what causes the observed differences in macroprudential regimes at a country level. The paper addresses this issue by way of an examination of housing sector related macroprudential policies in the UK and Germany. It finds that part of the reason for the observed differences is to be found in the fact that macroprudential authorities in the two countries tend to construct the intermediate goals of their macroprudential interventions in somewhat different ways, with the UK paying much greater attention to broader macroeconomic outcomes. These differences themselves, however, can only be properly understood in relation to the wider institutional and structural context (including different types of growth models) within the two countries, which create different links between their housing sectors and the real economy