The Anatomy Of The Transmission Of Macroprudential Policies

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The Anatomy of the Transmission of Macroprudential Policies

Viral V. Acharya,Katharina Bergant,Matteo Crosignani,Tim Eisert,Fergal McCann
The Anatomy of the Transmission of Macroprudential Policies Book PDF

Author : Viral V. Acharya,Katharina Bergant,Matteo Crosignani,Tim Eisert,Fergal McCann
Publisher : International Monetary Fund
Page : 57 pages
File Size : 44,7 Mb
Release : 2020-05-22
Category : Business & Economics
ISBN : 9781513545158

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The Anatomy of the Transmission of Macroprudential Policies by Viral V. Acharya,Katharina Bergant,Matteo Crosignani,Tim Eisert,Fergal McCann Pdf

We analyze how regulatory constraints on household leverage—in the form of loan-to-income and loan-to-value limits—a?ect residential mortgage credit and house prices as well as other asset classes not directly targeted by the limits. Supervisory loan level data suggest that mortgage credit is reallocated from low-to high-income borrowers and from urban to rural counties. This reallocation weakens the feedback loop between credit and house prices and slows down house price growth in “hot” housing markets. Consistent with constrained lenders adjusting their portfolio choice, more-a?ected banks drive this reallocation and substitute their risk-taking into holdings of securities and corporate credit.

Macroprudential Policy Effects

Nina Biljanovska,Sophia Chen,R. Gelos,Deniz Igan,Maria Martinez Peria,Erlend Nier,Fabian Valencia
Macroprudential Policy Effects Book PDF

Author : Nina Biljanovska,Sophia Chen,R. Gelos,Deniz Igan,Maria Martinez Peria,Erlend Nier,Fabian Valencia
Publisher : International Monetary Fund
Page : 52 pages
File Size : 43,8 Mb
Release : 2023-03-31
Category : Electronic
ISBN : 9798400226304

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Macroprudential Policy Effects by Nina Biljanovska,Sophia Chen,R. Gelos,Deniz Igan,Maria Martinez Peria,Erlend Nier,Fabian Valencia Pdf

The global financial crisis (GFC) underscored the need for additional policy tools to safeguard financial stability and ultimately macroeconomic stability. Systemic financial vulnerabilities had developed under a seemingly tranquil macroeconomic surface of low inflation and small output gaps. This challenged the precrisis view that achieving these traditional policy targets was a sufficient condition for macroeconomic stability. Thus, new tools had to be deployed to target specific financial vulnerabilities and to build buffers to cushion adverse aggregate shocks, while allowing traditional policy levers, including monetary and microprudential policies to focus on their traditional roles. Macroprudential policy measures emerged as the solution to this gap. Some of these measures had been used before the GFC (mostly in emerging markets). But it was only after the crisis that they were more widely adopted, and the toolkit expanded. This spurred a growing body of empirical research on the effects and potential shortfalls of these measures, with a further deepening of this knowledge gaining importance as policymakers confront increased financial stability risks in the post-pandemic world. Recognizing that there still is much to learn, this paper takes stock of our expanding understanding about the effects (and side effects) of macroprudential measures by focusing on these questions: What have we learned about the effects of macroprudential policy in containing the buildup of vulnerabilities? What do we know about the effects on economic activity and resilience? How do policy effects vary with conditions and over time? How important are leakages and circumvention? How do the effects on credit depend on other policies?

Effects of Macroprudential Policy: Evidence from Over 6,000 Estimates

Juliana Dutra Araujo,Manasa Patnam,Ms.Adina Popescu,Mr.Fabian Valencia,Weijia Yao
Effects of Macroprudential Policy Evidence from Over 6 000 Estimates Book PDF

Author : Juliana Dutra Araujo,Manasa Patnam,Ms.Adina Popescu,Mr.Fabian Valencia,Weijia Yao
Publisher : International Monetary Fund
Page : 53 pages
File Size : 54,6 Mb
Release : 2020-05-22
Category : Business & Economics
ISBN : 9781513545400

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Effects of Macroprudential Policy: Evidence from Over 6,000 Estimates by Juliana Dutra Araujo,Manasa Patnam,Ms.Adina Popescu,Mr.Fabian Valencia,Weijia Yao Pdf

This paper builds a novel database on the effects of macroprudential policy drawing from 58 empirical studies, comprising over 6,000 results on a wide range of instruments and outcome variables. It encompasses information on statistical significance, standardized magnitudes, and other characteristics of the estimates. Using meta-analysis techniques, the paper estimates average effects to find i) statistically significant effects on credit, but with considerable heterogeneity across instruments; ii) weaker and more imprecise effects on house prices; iii) quantitatively stronger effects in emerging markets and among studies using micro-level data; and iii) statistically significant evidence of leakages and spillovers. Other findings include relatively stronger impacts for tightening than loosening actions and negative effects on economic activity in the near term.

Micro-Assessment of Macroprudential Borrower-Based Measures in Lithuania

Mantas Dirma,Jaunius Karmelavičius
Micro Assessment of Macroprudential Borrower Based Measures in Lithuania Book PDF

Author : Mantas Dirma,Jaunius Karmelavičius
Publisher : International Monetary Fund
Page : 68 pages
File Size : 52,6 Mb
Release : 2023-10-27
Category : Business & Economics
ISBN : 9798400256578

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Micro-Assessment of Macroprudential Borrower-Based Measures in Lithuania by Mantas Dirma,Jaunius Karmelavičius Pdf

Despite having introduced borrower-based measures (BBM), Lithuania's housing and mortgage markets were booming during the low-interest-rate period, casting doubt on the macroprudential toolkit's ability to contain excessive mortgage growth. This paper assesses the adequacy of BBMs’ parametrization in Lithuania. We do so by building a novel lifetime expected credit loss framework that is founded on actual loan-level default and household income data. We show that the BBM package effectively contains mortgage credit risk and that housing loans are more resilient to stress than in the preregulatory era. Our BBM limit calibration exercise reveals that (1) in the low-rate environment, income-based measures could have been tighter; and (2) borrowers taking out secondary mortgages rightly are and should be required to pledge a higher down payment.

Dampening Global Financial Shocks: Can Macroprudential Regulation Help (More than Capital Controls)?

Katharina Bergant,Mr.Francesco Grigoli,Mr.Niels-Jakob H Hansen,Mr.Damiano Sandri
Dampening Global Financial Shocks Can Macroprudential Regulation Help More than Capital Controls Book PDF

Author : Katharina Bergant,Mr.Francesco Grigoli,Mr.Niels-Jakob H Hansen,Mr.Damiano Sandri
Publisher : International Monetary Fund
Page : 41 pages
File Size : 50,8 Mb
Release : 2020-06-26
Category : Business & Economics
ISBN : 9781513547763

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Dampening Global Financial Shocks: Can Macroprudential Regulation Help (More than Capital Controls)? by Katharina Bergant,Mr.Francesco Grigoli,Mr.Niels-Jakob H Hansen,Mr.Damiano Sandri Pdf

We show that macroprudential regulation can considerably dampen the impact of global financial shocks on emerging markets. More specifically, a tighter level of regulation reduces the sensitivity of GDP growth to VIX movements and capital flow shocks. A broad set of macroprudential tools contribute to this result, including measures targeting bank capital and liquidity, foreign currency mismatches, and risky forms of credit. We also find that tighter macroprudential regulation allows monetary policy to respond more countercyclically to global financial shocks. This could be an important channel through which macroprudential regulation enhances macroeconomic stability. These findings on the benefits of macroprudential regulation are particularly notable since we do not find evidence that stricter capital controls provide similar gains.

Differential Effects of Macroprudential Policy

Nina Biljanovska,Sophia Chen
Differential Effects of Macroprudential Policy Book PDF

Author : Nina Biljanovska,Sophia Chen
Publisher : International Monetary Fund
Page : 45 pages
File Size : 54,7 Mb
Release : 2023-02-24
Category : Business & Economics
ISBN : 9798400235719

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Differential Effects of Macroprudential Policy by Nina Biljanovska,Sophia Chen Pdf

We explore the differential effects of lender-based macroprudential policies on new mortgage borrowing for households of different income using a comprehensive dataset that links macroprudential policy actions with household survey data for European Union countries. The main results suggest that higher-income households on average experience a larger reduction in mortgage loan size than lower-income households when regulation targeting total lenders’ assets tightens. In contrast, lower-income households on average experience a larger reduction in mortgage loan size than higher-income households when regulation targeting lenders’ capital requirements tightens. We also provide evidence of the different channels through which the differential effects operate.

Macro-financial Stability Policy In A Globalised World: Lessons From International Experience - Selected Papers From The Asian Monetary Policy Forum 2021 Special Edition And Mas-bis Conference

Edward S Robinson,Claudio Borio,Hyun Song Shin
Macro financial Stability Policy In A Globalised World Lessons From International Experience Selected Papers From The Asian Monetary Policy Forum 2021 Special Edition And Mas bis Conference Book PDF

Author : Edward S Robinson,Claudio Borio,Hyun Song Shin
Publisher : World Scientific
Page : 724 pages
File Size : 45,9 Mb
Release : 2022-12-28
Category : Business & Economics
ISBN : 9789811259449

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Macro-financial Stability Policy In A Globalised World: Lessons From International Experience - Selected Papers From The Asian Monetary Policy Forum 2021 Special Edition And Mas-bis Conference by Edward S Robinson,Claudio Borio,Hyun Song Shin Pdf

Since at least the Great Financial Crisis, authorities around the world have increasingly relied on macroprudential policy to help secure financial stability and complement monetary policy as an integral element of a broader macro-financial stability framework. In today's interconnected global financial system, policy actions taken by the major advanced economies can have spillovers on the rest of the world through their impact on capital flows and exchange rates, potentially generating vulnerabilities across borders. Conversely, in emerging market economies, macroprudential policy as well as foreign exchange intervention and/or capital flow management policy can help mitigate the corresponding impact. This can in turn generate spillbacks on advanced economies — spillbacks that have become more sizeable as the emerging market economies' heft in the world has grown. Yet little is known about these interactions.The contents of this book are based on a conference held on 26-28 May 2021 and jointly hosted by the Monetary Authority of Singapore (MAS) and the Bank for International Settlements (BIS). It aims to contribute to existing literature on macro-financial policymaking by providing an overall conceptual framework and documenting the latest global trends and country experiences. In particular, it highlights the role of international spillovers and spillbacks, paying particular attention to emerging market economies. This book is essential reading for academics, graduate students and economic professionals. It can also serve as a handbook for policymakers at central banks, regulatory authorities and other government agencies tasked with designing and implementing macroprudential or more generally macro-financial stability policies. The book will also be of interest to researchers at international organisations.

Leakages from Macroprudential Regulations: The Case of Household-Specific Tools and Corporate Credit

International Monetary Fund
Leakages from Macroprudential Regulations The Case of Household Specific Tools and Corporate Credit Book PDF

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 35 pages
File Size : 55,6 Mb
Release : 2021-04-29
Category : Business & Economics
ISBN : 9781513573731

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Leakages from Macroprudential Regulations: The Case of Household-Specific Tools and Corporate Credit by International Monetary Fund Pdf

Sector-specific macroprudential regulations increase the riskiness of credit to other sectors. Using firm-level data, this paper computed the measures of the riskiness of corporate credit allocation for 29 advanced and emerging economies. Consistently across these measures, the paper finds that during credit expansions, an unexpected tightening of household-specific macroprudential tools is followed by a rise in riskier corporate lending. Quantitatively, such unexpected tightening during a period of rapid credit growth increases the riskiness of corporate credit by around 10 percent of the historical standard deviation. This result supports early policy interventions when credit vulnerabilities are still low, since sectoral leakages will be less important at this stage. Further evidence from bank lending standards surveys suggests that the leakage effects are stronger for larger firms compared to SMEs, consistent with recent evidence on the use of personal real estate as loan collateral by small firms.

Ireland

International Monetary,International Monetary Fund. Monetary and Capital Markets Department
Ireland Book PDF

Author : International Monetary,International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 52 pages
File Size : 50,9 Mb
Release : 2022-09-09
Category : Business & Economics
ISBN : 9798400217876

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Ireland by International Monetary,International Monetary Fund. Monetary and Capital Markets Department Pdf

Ireland is a small open economy that is part of a monetary union and has a major financial system. Within the Euro Area (EA), Ireland comprises a relatively small proportion of aggregate GDP (3.4 percent), of which a significant portion is attributable to foreign-owned multinational enterprises (MNEs). Yet, the Irish financial system holds assets of EUR 7.9 trillion, over 18 times GDP. Since monetary policy is carried out by the European Central Bank (ECB) for the entire EA, macroprudential policy has the potential to play a critical stabilizing role for the Irish financial system.

Handbook of International Economics

Anonim
Handbook of International Economics Book PDF

Author : Anonim
Publisher : Elsevier
Page : 370 pages
File Size : 55,8 Mb
Release : 2022-04-07
Category : Business & Economics
ISBN : 9780323957731

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Handbook of International Economics by Anonim Pdf

Handbook of International Economics, Sixth Edition provides a definitive reference for researchers and advanced graduate students. The book includes self-contained surveys of the current state of a branch of economics in the form of chapters prepared by leading specialists. These surveys summarize not only received results but also newer developments from journal articles and discussion papers. Chapters cover The Global Financial Cycle, Dominant Currency Paradigm: a review, Rethinking exchange rate regimes, CIP deviations, the dollar, and frictions in international capital markets, International macroeconomics with imperfect financial markets, The prudential use of capital controls and foreign currency reserves, and Financial crises: a survey. Provides the authority and expertise of leading contributors from an international board of authors Presents the latest release in the Handbook of International Economics series Includes self-contained surveys of the current state of a branch of economics in the form of chapters prepared by leading specialists

Central Banks and Supervisory Architecture in Europe

Holzmann, Robert,Restoy, Fernando
Central Banks and Supervisory Architecture in Europe Book PDF

Author : Holzmann, Robert,Restoy, Fernando
Publisher : Edward Elgar Publishing
Page : 253 pages
File Size : 48,5 Mb
Release : 2022-10-07
Category : Business & Economics
ISBN : 9781802208894

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Central Banks and Supervisory Architecture in Europe by Holzmann, Robert,Restoy, Fernando Pdf

COVID-19 and other recent crises have proved the need to review the state-of-play and implement robust institutional frameworks in the complex, heterogenous and decentralised European financial supervisory architecture, this insightful book outlines what can be done to innovate the current set-up in the face of pressing issues like climate change, BigTech and crypto assets.

Leveraged

Moritz Schularick
Leveraged Book PDF

Author : Moritz Schularick
Publisher : University of Chicago Press
Page : 318 pages
File Size : 53,6 Mb
Release : 2022-12-13
Category : Business & Economics
ISBN : 9780226816944

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Leveraged by Moritz Schularick Pdf

An authoritative guide to the new economics of our crisis-filled century. Published in collaboration with the Institute for New Economic Thinking. The 2008 financial crisis was a seismic event that laid bare how financial institutions’ instabilities can have devastating effects on societies and economies. COVID-19 brought similar financial devastation at the beginning of 2020 and once more massive interventions by central banks were needed to heed off the collapse of the financial system. All of which begs the question: why is our financial system so fragile and vulnerable that it needs government support so often? For a generation of economists who have risen to prominence since 2008, these events have defined not only how they view financial instability, but financial markets more broadly. Leveraged brings together these voices to take stock of what we have learned about the costs and causes of financial fragility and to offer a new canonical framework for understanding it. Their message: the origins of financial instability in modern economies run deeper than the technical debates around banking regulation, countercyclical capital buffers, or living wills for financial institutions. Leveraged offers a fundamentally new picture of how financial institutions and societies coexist, for better or worse. The essays here mark a new starting point for research in financial economics. As we muddle through the effects of a second financial crisis in this young century, Leveraged provides a road map and a research agenda for the future.

Preparing for the Next Financial Crisis

Olivier de Bandt,Francoise Drumetz,Christian Pfister
Preparing for the Next Financial Crisis Book PDF

Author : Olivier de Bandt,Francoise Drumetz,Christian Pfister
Publisher : Routledge
Page : 387 pages
File Size : 47,9 Mb
Release : 2020-12-28
Category : Business & Economics
ISBN : 9780429949555

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Preparing for the Next Financial Crisis by Olivier de Bandt,Francoise Drumetz,Christian Pfister Pdf

The ramifications of the Global Financial Crisis, which erupted in 2007, continue to surprise not only the general public but also finance professionals, economists, and journalists. Faced with this challenge, Preparing for the Next Financial Crisis goes back to basics. The authors ask: what do theory and empirical observations tell us about the causes and the consequences of financial crisis and instability? In what has become an increasingly complex financial world, what lessons can we learn from economic policies, which have been implemented, and research, which has developed extremely rapidly in recent years, so as not to repeat past mistakes? In this comprehensive review of the literature, which is both complete and balanced, the authors highlight the points of consensus among economists and policymakers. They assess the capacity of economic policies and institutions in limiting the cost of financial instability. In conclusion, they ask if the financial system has become safer, in the light especially of the Covid-19 Global Crisis. Ten years after the GFC crisis, this is a timely review of the reform agenda, the progress made, and the areas where further changes need to be made to address new risks and challenges.

The Evolution of Banking Regulation in the European Union

Nikolay Gertchev
The Evolution of Banking Regulation in the European Union Book PDF

Author : Nikolay Gertchev
Publisher : Rowman & Littlefield
Page : 187 pages
File Size : 54,8 Mb
Release : 2023-07-31
Category : Business & Economics
ISBN : 9781666937206

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The Evolution of Banking Regulation in the European Union by Nikolay Gertchev Pdf

This book rejects the modern tendency to evaluate banking regulation without reference to monetary theory by positioning the economic analysis of banking regulation within monetary economics.

The Anatomy of Monetary Policy Transmission in an Emerging Market

Kodjovi M. Eklou
The Anatomy of Monetary Policy Transmission in an Emerging Market Book PDF

Author : Kodjovi M. Eklou
Publisher : International Monetary Fund
Page : 29 pages
File Size : 50,5 Mb
Release : 2023-07-07
Category : Business & Economics
ISBN : 9798400247910

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The Anatomy of Monetary Policy Transmission in an Emerging Market by Kodjovi M. Eklou Pdf

Monetary policy transmission in EMs has been found to be weak historically due to under-developed financial markets and heavy central bank intervention in FX markets that undermine the exchange rate channel. Against this background, this paper investigates the transmission of monetary policy, including the role of external factors, in Malaysia and highlight findings that could be relevant for other EMs. We find an important role for the credit and the exchange rate channels. Further, we also find a complementary role for policy tools including Foreign Exchange Intervention (FXI) and liquidity tools such as Statutory Reserve Requirement in shaping the transmission of monetary policy. We then explore the spillover effects of external global factors including global monetary policy and global commodity prices on monetary policy transmission in a small open economy such as Malaysia. The results show that while global commodity prices do not impair monetary policy transmission, global monetary policy tightening could complement domestic efforts to achieve price stability by inducing a global disinflation. Finally, monetary policy transmission is delayed and weakened in high inflationary environment, with the implication that more aggressive and preemptive policy actions may be needed in such cases.