The Macroprudential Framework: Policy Responsiveness and Institutional Arrangements

Cheng Lim, Ivo Krznar, Fabian Lipinsky, Akira Otani and Xiaoyong Wu

No 2013/166, IMF Working Papers from International Monetary Fund

Abstract: This paper gauges if, and how, institutional arrangements are correlated with the use of macroprudential policy instruments. Using data from 39 countries, the paper evaluates policy response time in various types of institutional arrangements for macroprudential policy and finds that the macroprudential framework that gives the central bank an important role is associated with more timely use of macroprudential policy instruments. Policymakers may also tend to use macroprudential instruments more quickly if the ability to conduct monetary policy is somehow constrained. This finding points to the importance of coordination between macroprudential and monetary policy.

Keywords: WP; central bank; macroprudential; institutions; instruments; systemic risk; credit; interest rate; coordination body; government index; banking sector; central bank involvement; cross-agency policy coordination; risk tolerance; Macroprudential policy; Institutional arrangements for revenue administration; Macroprudential policy instruments; Financial sector stability; Financial sector; Middle East and Central Asia; Western Hemisphere; Global; Europe; Africa (search for similar items in EconPapers)
Pages: 40
Date: 2013-07-17
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Citations: View citations in EconPapers (64)

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