Effective Macroprudential Policy: Cross‐Sector Substitution from Price and Quantity Measures
Janko Cizel,
Jon Frost,
Aerdt Houben and
Peter Wierts
Journal of Money, Credit and Banking, 2019, vol. 51, issue 5, 1209-1235
Abstract:
Macroprudential policy is increasingly being implemented worldwide, and is mostly applied to banks. A key question is whether this prompts substitution toward nonbank credit. Using two different global data sets on macroprudential measures and different methodologies, including detrended series, panel estimations, and propensity score matching, we find evidence of such substitution. Substitution toward nonbank credit appears to be stronger when policy measures are binding and are implemented in economies with well‐developed nonbank credit markets. This substitution partially offsets the fall in bank credit, thus dampening the policies’ effect on total credit.
Date: 2019
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https://doi.org/10.1111/jmcb.12630
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Working Paper: Effective Macroprudential Policy: Cross-Sector Substitution from Price and Quantity Measures (2016) 
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:51:y:2019:i:5:p:1209-1235
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