Claudio Borio

Claudio Borio leads monetary and economic research at the Bank for International Settlements (BIS). He developed the "financial cycle" framework — distinguishing the financial cycle (credit and housing prices, typically 15-20 years) from the business cycle — which became central to post-2008 macroprudential policy discussions. His research argues that financial stability risks build slowly during good times and that macro-prudential tools should be deployed counter-cyclically. Borio's work influenced Basel III capital requirements and counter-cyclical capital buffer design. His empirical analysis of how expansionary monetary policy interacts with financial cycle dynamics — and can inadvertently fuel the very credit booms that later produce financial instability — provides central bankers with a framework for understanding why price stability alone is insufficient as a mandate for preventing systemic financial crises, and why a broader financial stability objective must complement traditional inflation targeting in modern monetary frameworks.