Unregulated Lending, Mortgage Regulations and Monetary Policy
Ugochi Emenogu () and
Brian Peterson ()
Staff Working Papers from Bank of Canada
Macroprudential policies are often aimed at the traditional banking sector while non-depository financial institutions or shadow banks have limited or no prudential regulations. This paper studies the macroeconomic impact of household-side macroprudential tightening in the presence of unregulated lenders. Our result shows that the presence of unregulated lenders dampens the impact of the policies on house prices and household debt. We also find that leakage to the unregulated sector increases when monetary policy is tightened.
Keywords: Financial institutions; Financial system regulation and policies; Monetary policy transmission (search for similar items in EconPapers)
Pages: 45 pages
New Economics Papers: this item is included in nep-ban, nep-cba, nep-dge, nep-mon, nep-reg and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:22-28
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