Macroprudential Policy: What Instruments and How to Use them? Lessons From Country Experiences

International Monetary Fund
Authors registered in the RePEc Author Service: Francesco Columba

No 2011/238, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; credit growth; exchange rate; interest rate; foreign currency; monetary policy; macroprudential; instruments; systemic risk; procyclicality; interconnectedness; credit; liquidity; capital; price inflation; growth decline; fiscal policy tool; deposit ratio; Macroprudential policy; Exchange rate arrangements; Eastern Europe (search for similar items in EconPapers)
Pages: 85
Date: 2011-10-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (436)

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