Essays on Macroprudential Policy and Financial Stability PDF Download
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Author: Silviu Oprică
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Silviu Oprică
Publisher:
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Category :
Languages : en
Pages :
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Author: Mehmet Ziya Gorpe
Publisher:
ISBN:
Category :
Languages : en
Pages : 150
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Author: International Monetary Fund. Fiscal Affairs Dept.
Publisher: International Monetary Fund
ISBN: 1498341705
Category : Business & Economics
Languages : en
Pages : 62
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The crisis has underscored the costs of systemic instability at both the national and the global levels and highlighted the need for dedicated macroprudential policies to achieve financial stability. Building on recent advances, this paper provides a framework to inform the IMF’s country-specific advice on macroprudential policy. It recognizes that developing macroprudential policy is a work in progress, and addresses key issues to help ensure its effectiveness.
Author: Ms.Aleksandra Zdzienicka
Publisher: International Monetary Fund
ISBN: 1513519158
Category : Business & Economics
Languages : en
Pages : 29
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The Global Financial Crisis has reopened discussions on the role of the monetary policy in preserving financial stability. Determining whether monetary policy affects financial variables domestically—especially compared to the effects of macroprudential policies— and across borders, is crucial in this context. This paper looks into these issues using U.S. exogenous monetary policy shocks and macroprudential policy measures. Estimates indicate that monetary policy shocks have significant and persistent effects on financial conditions and can attenuate long-term financial instability. In contrast, the impact of macroprudential policy measures is generally more immediate but shorter-lasting. Also, while an exogenous increase in U.S. monetary policy rates tends to reduce credit and house prices in other countries—with the effects varying with country-specific characteristics—an increase driven by improved U.S. economic conditions tends to have the opposite effect. Finally, we do not find evidence of cross-border spillover effects associated with U.S. macroprudential policies.
Author: Salim Dehmej
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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The aim of this thesis, composed of four academic papers, is to apply empirical and theoreticalanalyses to study the involvement of central banks in financial stability-confidence in the financial system's ability to facilitate allocation of economic resources, manage risks, and withstand shocks -and to discuss their recent macroprudential responsibilities. The global financial crisis (GFC) shitied the perspective of financial regulation - rules that financial institutions have to comply with in order to ensure effective risk management and to with stand financial shocks - and supervision - ensuring that financial institutions follow these rules - from a microprudential perspective based on the resilience of individual institutions to amacroprudential (henceforth · "MaP") perspective. The MaP perspective takes into account the interactions of financial institutions, the externalities related to their decisions, and also the effects of the financial cycle on central bank policy and financial stability. This thesis analyses the policy mix of monctary and macroprudential policies which both have an impact on price stability and financial conditions and which operate through common or overlapping channels. A particular focus is given to the role of MaP policy in heterogeneous monetary union such as the Eurozone- where countries are experience in different macroeconomic conditions - in terms of financial and macroeconomic stabilisation. Since a single interest rate is unlikely to fit circumstances in all countries, MaP policy could compensate the Jack of autonomous monetary policy in each country as both policies share many transmission channels. This enhances the optimality's degree of the currency area.
Author: International Monetary Fund. Monetary and Capital Markets Department
Publisher: International Monetary Fund
ISBN: 1498339174
Category : Business & Economics
Languages : en
Pages : 33
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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: Mr.Itai Agur
Publisher: International Monetary Fund
ISBN: 1498345379
Category : Business & Economics
Languages : en
Pages : 23
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How does monetary policy impact upon macroprudential regulation? This paper models monetary policy's transmission to bank risk taking, and its interaction with a regulator's optimization problem. The regulator uses its macroprudential tool, a leverage ratio, to maintain financial stability, while taking account of the impact on credit provision. A change in the monetary policy rate tilts the regulator's entire trade-off. We show that the regulator allows interest rate changes to partly "pass through" to bank soundness by not neutralizing the risk-taking channel of monetary policy. Thus, monetary policy affects financial stability, even in the presence of macroprudential regulation.
Author: Alejandro Buesa Olavarrieta
Publisher:
ISBN:
Category :
Languages : en
Pages : 136
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This doctoral thesis gathers three studies on different aspects of macroprudential policy and financial stability. The research questions featured in each of its parts are to be seen as complementary: one chapter concentrates on mortgage credit markets, another one explores the business decisions of banking institutions, while the remaining one considers the potential international implications of borrower-based measures.The first paper introduces a simplified picture of the mortgage credit market and itsbehaviour under regulatory constraints related to borrower-based macroprudential policies. More precisely, the chapter presents an assessment of the effects of loan-to-value (LTV) ratiocaps for housing mortgages using an agent-based model. Sellers, buyers and banks interact within a computational framework that enables the application of LTV caps to a one-stephousing market. The initial exercise, which relies upon simulated distributions of buyers and sellers, is followed by a more realistic setup calibrated through actual European data from the Household Finance and Consumption Survey. In both cases, the application of an LTV cap results in a modified distribution of buyers along property values, bidding prices and properties sold, depending on the shape of the probability distributions of the LTV ratio, wealth and debt-to- income ratios considered. The results are of similar magnitude to other studies in the literature embodying other analytical approaches and suggest that this methodology can potentially be used to gauge the impact of common macroprudential measures...
Author: Adnan Kummer
Publisher:
ISBN:
Category : Economic stabilization
Languages : en
Pages : 240
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Book Description
This dissertation consists of three essays on monetary policy. The first essay estimates the impact of the European Central Bank's (ECB) monetary policy rate changes on individual member country's economic output in Eurozone. The results show that real output responds differently in different Eurozone members and highlight the "convergence gap" that continues to exist among member countries. Based on their output response, the sample countries are divided into two groups which exhibit the breakdown of monetary policy transmission mechanism in the currency union. The second essay uses the Taylor rule model to calculate the optimal interest rates for individual eurozone members based on their local economic variables of output gap and inflation rate. The results indicate that at the aggregate level the Taylor rule tracks the ECB policy rate very closely but when the rule is applied to individual Eurozone countries, the models predicts very different rates for member economies. Additionally, the Eurozone sample countries are organized into two sets of groups namely Core versus Periphery and North versus South to analyze whether the national monetary policy requirements of member countries can be grouped based upon their economic characteristics and on their geographical location. In both cases, the rule predicts different rates for the groups compared to the ECB policy rates. The third essay investigates the institutional arrangement of monetary policy and its interaction with macroprudential policy in economic and financial stability. The interactions of macroprudential policy with both monetary and fiscal policy are explored to determine the effectiveness of this new policy framework. The analysis shows that while political and budget support are essential for the policy's design and implementation, there should be no connection politically with the execution of macroprudential policy because of short-sightedness of the political process which could potentially delay or jeopardize the roll-out of the policy's tools when necessary. Overall, the dissertation contributes to the growing literature on monetary policy in currency unions and offers policy insights to overcome the obstacles of monetary policy transmission mechanism and to develop a more robust policy framework for economic and financial stability.
Author: Douglas D Evanoff
Publisher: World Scientific
ISBN: 9814405159
Category : Business & Economics
Languages : en
Pages : 421
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This book is a collection of papers presented in the conference held at the Federal Reserve Bank of Chicago in September 2010, that examines the role of macroprudential regulation in the financial industry. Shocked by the experience of the last few years, many argue that the more traditional microprudential regulatory tools are inadequate to create a safe and stable financial system. The microprudential paradigm relies on the presumption that the financial system as a whole can be made safe by ensuring individual financial institutions are made safe. This ignores interconnections and externalities, whereby the actions of one financial institution or events in financial markets can lead to spillover effects that adversely affect general market conditions, other financial institutions, and ultimately the economy as a whole. Instead, it is argued, there is a need for both microprudential approaches to regulate individual institutions and macroprudential approaches to manage the overall financial system risks.Conference participants discussed macroprudential regulation and related issues, including: What are the theoretical motivations for macroprudential regulation? How would it interact with other regulatory and macroeconomic policies, especially monetary policy? What would be the specific macroprudential tools? Who should have control over the macroprudential tools? How should a macroprudential regulator be structured? Where should it be housed? How can macroprudential policies be structured across national borders? What role, if any, can market discipline play in supporting macroprudential objectives?Concentrating on public policy issues, the conference featured keynote addresses by influential past and present public policy figures including: Paul Volcker, Chairman of the US President's Economic Recovery Advisory Board and former Chairman of the Federal Reserve System; Tommaso Padoa-Schioppa, Chairman, Promontory Financial Group Europe and Former Chairman of the Basel Committee on Banking Supervision; Jaime Caruana, General Manager of the Bank for International Settlements and Former Chairman of the Basel Committee on Banking Supervision; and Charles Taylor, Director of the Pew Charitable Trust Financial Reform Project and Former Executive Director of the Group of Thirty.
