The last financial crisis and the case for macro-prudential intervention

Chris Hunt
Additional contact information
Chris Hunt: Reserve Bank of New Zealand, http://www.rbnz.govt.nz

Reserve Bank of New Zealand Bulletin, 2013, vol. 76, No 2, 3-16

Abstract: This article takes a look back at the last financial cycle that occurred over the previous decade – a cycle that contributed to one of the longest periods of uninterrupted economic growth in New Zealand for the past 60 years. It conducts a counterfactual exercise that maps the Reserve Bank’s new macro-prudential policy framework on to financial system developments over the period. It finds that, with the benefit of hindsight, there would have been a compelling case for macro-prudential intervention from 2005 onwards to address a build-up of systemic risk within the financial sector. The temporary increase in capital or liquidity buffers, or the application of loan-to-value restrictions on residential mortgages, would have materially enhanced the resilience of the financial system in the face of developments late in the decade. Macro-prudential intervention may have also tempered credit and asset price developments during the boom itself.

Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.rbnz.govt.nz/-/media/ReserveBank/Files/ ... /2013jun76-2hunt.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nzb:nzbbul:jun2013:01

Access Statistics for this article

More articles in Reserve Bank of New Zealand Bulletin from Reserve Bank of New Zealand Contact information at EDIRC.
Bibliographic data for series maintained by Reserve Bank of New Zealand Knowledge Centre ().