Cross-border prudential policy spillovers: how much? How important? Evidence from the International Banking Research Network

Claudia Buch and Linda Goldberg

No 801, Staff Reports from Federal Reserve Bank of New York

Abstract: The development of macroprudential policy tools has been one of the most significant changes in banking regulation in recent years. In this multi-study initiative of the International Banking Research Network, researchers from fifteen central banks and two international organizations use micro-banking data in conjunction with a novel data set of prudential instruments to study international spillovers of prudential policy changes and their effects on bank lending growth. The collective analysis has three main findings. First, the effects of prudential instruments sometimes spill over borders through bank lending. Second, international spillovers vary across prudential instruments and are heterogeneous across banks. Bank-specific factors like balance sheet conditions and business models drive the amplitude and direction of spillovers to lending growth rates. Third, the effects of international spillovers of prudential policy on loan growth rates have not been large on average. However, our results tend to underestimate the full effect by focusing on adjustment along the intensive margin and by analyzing a period in which relatively few countries implemented country-specific macroprudential policies.

Keywords: international banking; macroprudential; spillovers; lending; regulation (search for similar items in EconPapers)
JEL-codes: F34 G01 G21 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2016-11-01
New Economics Papers: this item is included in nep-cse and nep-opm
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Citations: View citations in EconPapers (31)

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Related works:
Journal Article: Cross-Border Prudential Policy Spillovers: How Much? How Important? Evidence from the International Banking Research Network (2017)
Working Paper: Cross-border prudential policy spillovers: How much? How important? Evidence from the international banking research network (2017)
Working Paper: Cross-Border Prudential Policy Spillovers: How Much? How Important? Evidence from the International Banking Research Network (2016)
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