Enhancing macroprudential space when interest rates are “low for long”

Matthieu Darracq Paries, Christoffer Kok and Matthias Rottner

Macroprudential Bulletin, 2020, vol. 11

Abstract: Had authorities built up larger countercyclical buffers before the pandemic, it would have been easier to release capital in response to the crisis. The “lower for longer” interest rate environment reinforces the case for building up releasable buffers in good times. The article shows that enhancing countercyclical capacity can improve the policy mix available to achieve macro-financial stabilisation. JEL Classification: E32, E44, E52, E58, G21

Keywords: countercyclical capital buffer; macroprudential and monetary policy interaction; negative interest rates; releasable capital (search for similar items in EconPapers)
Date: 2020-10
Note: 604093
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Citations: View citations in EconPapers (5)

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