The Use And Effectiveness Of Macroprudential Policies

Author : Mr.Eugenio Cerutti,Mr.Stijn Claessens,Mr.Luc Laeven
Publisher : International Monetary Fund
Page : 43 pages
File Size : 55,6 Mb
Release : 2015-03-17
Category : Business & Economics
ISBN : 9781498321051

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The Use and Effectiveness of Macroprudential Policies by Mr.Eugenio Cerutti,Mr.Stijn Claessens,Mr.Luc Laeven Pdf

Using a recent IMF survey and expanding on previous studies, we document the use of macroprudential policies for 119 countries over the 2000-13 period, covering many instruments. Emerging economies use macroprudential policies most frequently, especially foreign exchange related ones, while advanced countries use borrower-based policies more. Usage is generally associated with lower growth in credit, notably in household credit. Effects are less in financially more developed and open economies, however, and usage comes with greater cross-border borrowing, suggesting some avoidance. And while macroprudential policies can help manage financial cycles, they work less well in busts.

Author : Eugenio Cerutti
Publisher : Unknown
Page : 44 pages
File Size : 54,6 Mb
Release : 2015
Category : Electronic
ISBN : 1498358888

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The Use and Effectiveness of Macroprudential Policies: Variables Definitions and Sources; 1b. Regression Variables; 1c. Country Subgroup Classification; 2. Macroprudential Policy Variables; 3. Descriptive Statistics of Main Regression Variables; 4. Macroprudential Policies and Credit Growth: Main Regression Results; 5. Effects of Instrument by Subgroups; 6. Effects of Individual Instruments on Several Variables; 7. Effects on Cross-Border Credit Ratio by Eugenio Cerutti Pdf

Author : Mr.Tigran Poghosyan
Publisher : International Monetary Fund
Page : 42 pages
File Size : 45,6 Mb
Release : 2019-03-01
Category : Business & Economics
ISBN : 9781498300872

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How Effective is Macroprudential Policy? Evidence from Lending Restriction Measures in EU Countries by Mr.Tigran Poghosyan Pdf

This paper assesses the effectiveness of lending restriction measures, such as loan-to-value and debt-service-to-income ratios, in affecting developments in house prices and credit. We use data on 99 lending standard restrictions implemented in 28 EU countries over 1990–2018. The results suggest that lending restriction measures are generally effective in curbing house prices and credit. However, the impact is delayed and reaches its peak only after three years. In addition, the impact is asymmetric, with tightening measures having weaker association with target variables compared to loosening measures. The association is stronger in countries outside of euro area and for legally-binding measures and measures involving sanctions. The results have practical implications for macroprudential authorities.

Author : International Monetary Fund. Fiscal Affairs Dept.,International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 64 pages
File Size : 42,9 Mb
Release : 2013-10-06
Category : Business & Economics
ISBN : 9781498341714

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Key Aspects of Macroprudential Policy - Background Paper by International Monetary Fund. Fiscal Affairs Dept.,International Monetary Fund. Monetary and Capital Markets Department Pdf

The countercyclical capital buffer (CCB) was proposed by the Basel committee to increase the resilience of the banking sector to negative shocks. The interactions between banking sector losses and the real economy highlight the importance of building a capital buffer in periods when systemic risks are rising. Basel III introduces a framework for a time-varying capital buffer on top of the minimum capital requirement and another time-invariant buffer (the conservation buffer). The CCB aims to make banks more resilient against imbalances in credit markets and thereby enhance medium-term prospects of the economy—in good times when system-wide risks are growing, the regulators could impose the CCB which would help the banks to withstand losses in bad times.

Author : Meghana Ayyagari,Thorsten Beck,Mr.Maria Soledad Martinez Peria
Publisher : International Monetary Fund
Page : 65 pages
File Size : 45,5 Mb
Release : 2018-12-07
Category : Business & Economics
ISBN : 9781484390504

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The Micro Impact of Macroprudential Policies: Firm-Level Evidence by Meghana Ayyagari,Thorsten Beck,Mr.Maria Soledad Martinez Peria Pdf

Combining balance sheet data on 900,000 firms from 48 countries with information on the adoption of macroprudential policies during 2003-2011, we find that these policies are associated with lower credit growth. These effects are especially significant for micro, small and medium enterprises (MSMEs) and young firms that, according to the literature, are more financially constrained and bank dependent. Among MSMEs and young firms, those with weaker balance sheets exhibit lower credit growth in conjunction with the adoption of macroprudential policies, suggesting that these policies can enhance financial stability. Finally, our results show that macroprudential policies have real effects, as they are associated with lower investment and sales growth.

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
Page : 33 pages
File Size : 46,9 Mb
Release : 2011-03-14
Category : Business & Economics
ISBN : 9781498339179

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Macroprudential Policy - An Organizing Framework - Background Paper by International Monetary Fund. Monetary and Capital Markets Department Pdf

MCM conducted a survey in December 2010 to take stock of international experiences with financial stability and the evolving macroprudential policy framework. The survey was designed to seek information in three broad areas: the institutional setup for macroprudential policy, the analytical approach to systemic risk monitoring, and the macroprudential policy toolkit. The survey was sent to 63 countries and the European Central Bank (ECB), including all countries in the G-20 and those subject to mandatory Financial Sector Assessment Programs (FSAPs). The target list is designed to cover a broad range of jurisdictions in all regions, but more weight is given to economies that are systemically important (see Annex for details). The response rate is 80 percent. This note provides a summary of the survey’s main findings.

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 85 pages
File Size : 41,5 Mb
Release : 2011-10-01
Category : Business & Economics
ISBN : 9781463922603

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Macroprudential Policy by International Monetary Fund Pdf

This paper provides the most comprehensive empirical study of the effectiveness of macroprudential instruments to date. Using data from 49 countries, the paper evaluates the effectiveness of macroprudential instruments in reducing systemic risk over time and across institutions and markets. The analysis suggests that many of the most frequently used instruments are effective in reducing pro-cyclicality and the effectiveness is sensitive to the type of shock facing the financial sector. Based on these findings, the paper identifies conditions under which macroprudential policy is most likely to be effective, as well as conditions under which it may have little impact.

Author : Mr.F. Gulcin Ozkan,Ms.Filiz Unsal
Publisher : International Monetary Fund
Page : 34 pages
File Size : 52,7 Mb
Release : 2014-06-24
Category : Business & Economics
ISBN : 9781498375429

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On the use of Monetary and Macroprudential Policies for Small Open Economies by Mr.F. Gulcin Ozkan,Ms.Filiz Unsal Pdf

We explore optimal monetary and macroprudential policy rules for a small open economy. Delegating 'lean against the wind' squarely to macroprudential policy provides a more robust policy mix to shock uncertainty—(i) if macroprudential measures exist, there are no significant welfare gains from monetary policy reacting to credit growth under a financial shock; and (ii) monetary responses to financial markets could generate bigger welfare losses than macroprudential responses under different shocks. The source of outstanding liabilities also plays a role in the choice of policy instrument— macroprudential policies are particularly effective for emerging markets where foreign borrowing is sizeable.

Author : Anat Keller
Publisher : Unknown
Page : 0 pages
File Size : 51,6 Mb
Release : 2020
Category : Economic policy
ISBN : 1780687877

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Legal Foundations of Macroprudential Policy by Anat Keller Pdf

Macroprudential policy focuses on the financial system as a whole, as distinct from individual institutions, and its objective is to limit the costs to the real economy from system-wide distress of the financial sector. This book helps readers discover and decipher the multi-faceted and fascinating area of macroprudential policy through taking a theoretical, interdisciplinary and legal-focused approach.

Author : Mr.Stijn Claessens,Swati R. Ghosh,MissRoxana Mihet
Publisher : International Monetary Fund
Page : 36 pages
File Size : 50,7 Mb
Release : 2014-08-19
Category : Business & Economics
ISBN : 9781498357609

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Macro-Prudential Policies to Mitigate Financial System Vulnerabilities by Mr.Stijn Claessens,Swati R. Ghosh,MissRoxana Mihet Pdf

Macro-prudential policies aimed at mitigating systemic financial risks have become part of the policy toolkit in many emerging markets and some advanced countries. Their effectiveness and efficacy are not well-known, however. Using panel data regressions, we analyze how changes in balance sheets of some 2,800 banks in 48 countries over 2000–2010 respond to specific macro-prudential policies. Controlling for endogeneity, we find that measures aimed at borrowers––caps on debt-to-income and loan-to-value ratios––and at financial institutions––limits on credit growth and foreign currency lending––are effective in reducing asset growth. Countercyclical buffers are little effective through the cycle, and some measures are even counterproductive during downswings, serving to aggravate declines, consistent with the ex-ante nature of macro-prudential tools.

Author : Xavier Freixas,Luc Laeven,Jose-Luis Peydro
Publisher : MIT Press
Page : 487 pages
File Size : 52,6 Mb
Release : 2015-06-19
Category : Business & Economics
ISBN : 9780262028691

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Systemic Risk, Crises, and Macroprudential Regulation by Xavier Freixas,Luc Laeven,Jose-Luis Peydro Pdf

A framework for macroprudential regulation that defines systemic risk and macroprudential policy, describes macroprudential tools, and surveys the effectiveness of existing macroprudential regulation. The recent financial crisis has shattered all standard approaches to banking regulation. Regulators now recognize that banking regulation cannot be simply based on individual financial institutions' risks. Instead, systemic risk and macroprudential regulation have come to the forefront of the new regulatory paradigm. Yet our knowledge of these two core aspects of regulation is still limited and fragmented. This book offers a framework for understanding the reasons for the regulatory shift from a microprudential to a macroprudential approach to financial regulation. It defines systemic risk and macroprudential policy, cutting through the generalized confusion as to their meaning; contrasts macroprudential to microprudential approaches; discusses the interaction of macroprudential policy with macroeconomic policy (monetary policy in particular); and describes macroprudential tools and experiences with macroprudential regulation around the world. The book also considers the remaining challenges for establishing effective macroprudential policy and broader issues in regulatory reform. These include the optimal size and structure of the financial system, the multiplicity of regulatory bodies in the United States, the supervision of cross-border financial institutions, and the need for international cooperation on macroprudential policies.

Author : Mr.Stijn Claessens
Publisher : International Monetary Fund
Page : 38 pages
File Size : 54,9 Mb
Release : 2014-12-11
Category : Business & Economics
ISBN : 9781498340939

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An Overview of Macroprudential Policy Tools by Mr.Stijn Claessens Pdf

Macroprudential policies – caps on loan to value ratios, limits on credit growth and other balance sheets restrictions, (countercyclical) capital and reserve requirements and surcharges, and Pigouvian levies – have become part of the policy paradigm in emerging markets and advanced countries alike. But knowledge is still limited on these tools. Macroprudential policies ought to be motivated by market failures and externalities, but these can be hard to identify. They can also interact with various other policies, such as monetary and microprudential, raising coordination issues. Some countries, especially emerging markets, have used these tools and analyses suggest that some can reduce procyclicality and crisis risks. Yet, much remains to be studied, including tools’ costs ? by adversely affecting resource allocations; how to best adapt tools to country circumstances; and preferred institutional designs, including how to address political economy risks. As such, policy makers should move carefully in adopting tools.

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 45 pages
File Size : 41,9 Mb
Release : 2014-06-11
Category : Business & Economics
ISBN : 9781498342629

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Staff Guidance Note on Macroprudential Policy by International Monetary Fund Pdf

This note provides guidance to facilitate the staff’s advice on macroprudential policy in Fund surveillance. It elaborates on the principles set out in the “Key Aspects of Macroprudential Policy,” taking into account the work of international standard setters as well as the evolving country experience with macroprudential policy. The main note is accompanied by supplements offering Detailed Guidance on Instruments and Considerations for Low Income Countries

Author : Muhammad Shahbaz,Alaa Soliman,Subhan Ullah
Publisher : Springer Nature
Page : 245 pages
File Size : 48,7 Mb
Release : 2021-09-21
Category : Business & Economics
ISBN : 9783030790035

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Economic Growth and Financial Development by Muhammad Shahbaz,Alaa Soliman,Subhan Ullah Pdf

This book looks into the relationship between financial development, economic growth, and the possibility of a potential capital flight in the transmission process. It also examines the important role that financial institutions, financial markets, and country-level institutional factors play in economic growth and their impact on capital flight in emerging economies. By presenting new theoretical insights and empirical country studies as well as econometric approaches, the authors focus on the relationship between financial development and economic growth with capital flight in the era of financial crisis. Therefore, this book is a must-read for researchers, scholars, and policy-makers, interested in a better understanding of economic growth and financial development of emerging economies alike.

Author : Mr.Jerome Vandenbussche,Ms.Ursula Vogel,Ms.Enrica Detragiache
Publisher : International Monetary Fund
Page : 36 pages
File Size : 52,8 Mb
Release : 2012-12-27
Category : Business & Economics
ISBN : 9781475587449

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Macroprudential Policies and Housing Price by Mr.Jerome Vandenbussche,Ms.Ursula Vogel,Ms.Enrica Detragiache Pdf

Several countries in Central, Eastern and Southeastern Europe used a rich set of prudential instruments in response to last decade’s credit and housing boom and bust cycles. We collect detailed information on these policy measures in a comprehensive database covering 16 countries at a quarterly frequency. We use this database to investigate whether the policy measures had an impact on housing price inflation. Our evidence suggests that some—but not all—measures did have an impact. These measures were changes in the minimum CAR and non-standard liquidity measures (marginal reserve requirements on foreign funding, marginal reserve requirements linked to credit growth).