Does governance quality enhance the efficacy of macroprudential policy?

Mallika Saha and Kumar Debasis Dutta

Economics Letters, 2021, vol. 204, issue C

Abstract: This paper explores the role of governance quality (GQ) in assisting macroprudential regulations (MPRs) to minimize the financial risk (FR). We collect data of 124 countries over 2000–2017 years and estimate the joint-impact of GQ and MPRs applying advanced econometric methods that deal with the endogeneity and ensure the robustness. Our results confirm that the role of GQ in MPRs–FR interaction depends on the nature of MPR instruments. These findings are critical for devising policies to preserve financial stability (FS).

Keywords: Governance; Macroprudential-regulations; Financial risk; System-GMM; 3SLS (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:204:y:2021:i:c:s0165176521001634

DOI: 10.1016/j.econlet.2021.109886

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