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Author: Jisung Moon
Publisher:
ISBN:
Category : Banks and banking, Foreign
Languages : en
Pages : 0
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Book Description
The Korean economy has suffered two financial crises in 1997 and 2008, mainly due to volatile capital flows by foreign bank branches in Korea. Therefore, it is very important to understand the economic drivers and mechanisms of their capital flow management decisions. So far, it is known that foreign bank branches tend to actively adjust their borrowings from headquarters in response to changes in monetary policy in their home countries. However, in the first chapter, I find statistically significant evidence that Covered Interest Parity deviation and home macroprudential policies are more important factors than home monetary policy. I also demonstrate that no single country (or single currency) can play a dominant role in interoffice borrowings between headquarters and their branches in Korea. In the second chapter, I find evidence that the leverage cap regulation introduced by the Korean government in 2010 as one of the foreign exchange related macroprudential policy measures contributed to enhancing financial stability without hampering the positive roles of foreign bank branches in Korea. Specifically, foreign bank branches responded to changes in leverage cap regulation by adjusting their capital, and their business activities were not affected by the regulatory changes. In the third chapter, I review the challenges that Korea has faced due to the volatile cross-border capital flows and the Korean government's efforts to achieve successful economic growth and financial stability, especially focusing on the development of a prudential regulatory system during three phases: 1) before the 1997 Asian Financial Crisis, 2) between the 1997 Asian Financial Crisis and the 2008 Global Financial Crisis, and 3) after the 2008 Global Financial Crisis to the present.
Author: Jisung Moon
Publisher:
ISBN:
Category : Banks and banking, Foreign
Languages : en
Pages : 0
Get Book Here
Book Description
The Korean economy has suffered two financial crises in 1997 and 2008, mainly due to volatile capital flows by foreign bank branches in Korea. Therefore, it is very important to understand the economic drivers and mechanisms of their capital flow management decisions. So far, it is known that foreign bank branches tend to actively adjust their borrowings from headquarters in response to changes in monetary policy in their home countries. However, in the first chapter, I find statistically significant evidence that Covered Interest Parity deviation and home macroprudential policies are more important factors than home monetary policy. I also demonstrate that no single country (or single currency) can play a dominant role in interoffice borrowings between headquarters and their branches in Korea. In the second chapter, I find evidence that the leverage cap regulation introduced by the Korean government in 2010 as one of the foreign exchange related macroprudential policy measures contributed to enhancing financial stability without hampering the positive roles of foreign bank branches in Korea. Specifically, foreign bank branches responded to changes in leverage cap regulation by adjusting their capital, and their business activities were not affected by the regulatory changes. In the third chapter, I review the challenges that Korea has faced due to the volatile cross-border capital flows and the Korean government's efforts to achieve successful economic growth and financial stability, especially focusing on the development of a prudential regulatory system during three phases: 1) before the 1997 Asian Financial Crisis, 2) between the 1997 Asian Financial Crisis and the 2008 Global Financial Crisis, and 3) after the 2008 Global Financial Crisis to the present.
Author: Mr.Eugenio M Cerutti
Publisher: International Monetary Fund
ISBN: 1484379187
Category : Business & Economics
Languages : en
Pages : 46
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Book Description
We analyze the joint impact of macroprudential and capital control measures on cross-border banking flows, while controlling for multidimensional aspects in lender-and-borrower-relationships (e.g., distance, cultural proximity, microprudential regulations). We uncover interesting spillover effects from both types of measures when applied either by lender or borrowing countries, with many of them most likely associated with circumvention or arbitrage incentives. While lender countries’ macroprudential policies reduce direct cross-border banking outflows, they are associated with larger outflows through local affiliates. Direct cross-border inflows are higher in borrower countries with more usage of macroprudential policies, and are linked to circumvention motives. In the case of capital controls, most spillovers seem to be present through local affiliates. We do not find evidence to support the idea that additional capital inflow controls could interact with macro-prudential policies to mitigate cross-border spillovers.
Author: Dongsoo Kang
Publisher: Edward Elgar Publishing
ISBN: 1785369571
Category : Business & Economics
Languages : en
Pages : 329
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Book Description
Recent events, such as capital flow reversals and banking sector crises, have shaken faith in the widely held belief in the benefits of greater financial integration and financial deepening, which are typical in advanced economies. This book shows that emerging economies have often weathered the storm best despite the supposed burden of ‘weak institutions’. It demonstrates that a better policy framework requires reliable indicators of vulnerability to financial instability, as well as improved policy tools and automatic stabilizers that anticipate and limit the vulnerabilities to financial crises.
Author: Iwan J. Azis
Publisher: Springer
ISBN: 9812872841
Category : Business & Economics
Languages : en
Pages : 129
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Book Description
This book discusses the risks and opportunities that arise in Emerging Asia given the context of a new environment in global liquidity and capital flows. It elaborates on the need to ensure financial and overall economic stability in the region through improved financial regulation and other policy measures to minimize the emergent risks. "Managing Elevated Risk: Global Liquidity, Capital Flows, and Macroprudential Policy—An Asian Perspective" also explores the range of policy options that may be deployed to address the impact of global liquidity on domestic financial and socio-economic conditions including income inequality. The book is primarily aimed at policy makers, financial market regulators and supervisory agencies to help them improve national regulatory systems and to promote harmonization of national regulations and practices in line with global standards. Scholars and researchers will also gain important information and knowledge about the overall impacts of changing global liquidity from the book.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1498342620
Category : Business & Economics
Languages : en
Pages : 45
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Book Description
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: Matteo Ghilardi
Publisher: International Monetary Fund
ISBN: 1498365655
Category : Business & Economics
Languages : en
Pages : 31
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Book Description
This paper develops an open-economy DSGE model with an optimizing banking sector to assess the role of capital flows, macro-financial linkages, and macroprudential policies in emerging Asia. The key result is that macro-prudential measures can usefully complement monetary policy. Countercyclical macroprudential polices can help reduce macroeconomic volatility and enhance welfare. The results also demonstrate the importance of capital flows and financial stability for business cycle fluctuations as well as the role of supply side financial accelerator effects in the amplification and propagation of shocks.
Author: Otaviano Canuto
Publisher: World Bank Publications
ISBN: 1464800030
Category : Business & Economics
Languages : en
Pages : 307
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Book Description
This book deals with the challenges of macro financial linkages in the emerging markets.
Author: John Beirne
Publisher:
ISBN:
Category : Capital movements
Languages : en
Pages : 34
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Book Description
Author: Mr.Nicolas Arregui
Publisher: International Monetary Fund
ISBN: 1484335724
Category : Business & Economics
Languages : en
Pages : 73
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Book Description
The paper proposes a simple, new, analytical framework for assessing the cost and benefits of macroprudential policies. It proposes a measure of net benefits in terms of parameters that can be estimated: the probability of crisis, the loss in output given crisis, policy effectiveness in bringing down both the probability and damage during crisis, and the output-cost of a policy decision. It discusses three types of policy leakages and identifies instruments that could best minimize the leakages. Some rules of thumb for policymakers are provided.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1463922604
Category : Business & Economics
Languages : en
Pages : 85
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Book Description
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.
