The fatal flaw in macropru: it ignores political risk

Jon Danielsson and Robert Macrae

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Political risk is a major cause of systemic financial risk. This column argues that both the integrity and the legitimacy of macroprudential policy, or ‘macropru’, depends on political risk being included with other risk factors. Yet it is usually excluded from macropru, and that could be a fatal flaw.

Keywords: macropru; microprudential risk; systemic risk; monetary policy; regulation (search for similar items in EconPapers)
JEL-codes: E0 (search for similar items in EconPapers)
Date: 2016-12-08
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in VoxEU, 8, December, 2016

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:70703

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