Macroprudential Policy An Organizing Framework Background Paper

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
ISBN 13 : 1498339166
Total Pages : 60 pages
Book Rating : 4.62/5 ( download)

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Download or read book Macroprudential Policy - An Organizing Framework written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2011-03-14 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: Macroprudential policy is a complement to microprudential policy and it interacts with other types of public policy that have an impact on systemic financial stability. Indeed, prudential regulation, as carried out in the past, also had some macroprudential aspects, and the recent crisis has reinforced this focus; hence, a clear separation between “micro” and “macro” prudential, if useful conceptually, is difficult to delineate in practice. Moreover, no matter how different policy mandates are structured, financial stability tends to be a common responsibility, reflecting the far reaching consequences of financial crises. This calls for coordination across policies, to ensure that systemic risk is comprehensively addressed. Equally important, macroprudential policy is no substitute for sound policies more broadly, including, in particular, strong prudential regulation and supervision, and sound macroeconomic policies. Operational independence in other policy areas, including monetary and microprudential policy, should not be undermined in the name of macroprudential policy. Finally, given the global nature of the financial system, the multilateral aspects of macroprudential policy will need to be fully considered—an important aspect that is only touched upon in this paper.

Author : International Monetary Fund. Monetary and Capital Markets Department
Publisher : International Monetary Fund
ISBN 13 : 1498339174
Total Pages : 33 pages
Book Rating : 4.79/5 ( download)

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Download or read book Macroprudential Policy - An Organizing Framework - Background Paper written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2011-03-14 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: MCM conducted a survey in December 2010 to take stock of international experiences with financial stability and the evolving macroprudential policy framework. The survey was designed to seek information in three broad areas: the institutional setup for macroprudential policy, the analytical approach to systemic risk monitoring, and the macroprudential policy toolkit. The survey was sent to 63 countries and the European Central Bank (ECB), including all countries in the G-20 and those subject to mandatory Financial Sector Assessment Programs (FSAPs). The target list is designed to cover a broad range of jurisdictions in all regions, but more weight is given to economies that are systemically important (see Annex for details). The response rate is 80 percent. This note provides a summary of the survey’s main findings.

Author : International Monetary Fund. Fiscal Affairs Dept.
Publisher : International Monetary Fund
ISBN 13 : 1498341713
Total Pages : 64 pages
Book Rating : 4.14/5 ( download)

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Download or read book Key Aspects of Macroprudential Policy - Background Paper written by International Monetary Fund. Fiscal Affairs Dept. and published by International Monetary Fund. This book was released on 2013-10-06 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: The countercyclical capital buffer (CCB) was proposed by the Basel committee to increase the resilience of the banking sector to negative shocks. The interactions between banking sector losses and the real economy highlight the importance of building a capital buffer in periods when systemic risks are rising. Basel III introduces a framework for a time-varying capital buffer on top of the minimum capital requirement and another time-invariant buffer (the conservation buffer). The CCB aims to make banks more resilient against imbalances in credit markets and thereby enhance medium-term prospects of the economy—in good times when system-wide risks are growing, the regulators could impose the CCB which would help the banks to withstand losses in bad times.

Author : International Monetary Fund
Publisher : International Monetary Fund
ISBN 13 : 1498342620
Total Pages : 45 pages
Book Rating : 4.29/5 ( download)

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Download or read book Staff Guidance Note on Macroprudential Policy written by International Monetary Fund and published by International Monetary Fund. This book was released on 2014-06-11 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This note provides guidance to facilitate the staff’s advice on macroprudential policy in Fund surveillance. It elaborates on the principles set out in the “Key Aspects of Macroprudential Policy,” taking into account the work of international standard setters as well as the evolving country experience with macroprudential policy. The main note is accompanied by supplements offering Detailed Guidance on Instruments and Considerations for Low Income Countries

Author : Mr.Stijn Claessens
Publisher : International Monetary Fund
ISBN 13 : 1498357601
Total Pages : 36 pages
Book Rating : 4.09/5 ( download)

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Download or read book Macro-Prudential Policies to Mitigate Financial System Vulnerabilities written by Mr.Stijn Claessens and published by International Monetary Fund. This book was released on 2014-08-19 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Macro-prudential policies aimed at mitigating systemic financial risks have become part of the policy toolkit in many emerging markets and some advanced countries. Their effectiveness and efficacy are not well-known, however. Using panel data regressions, we analyze how changes in balance sheets of some 2,800 banks in 48 countries over 2000–2010 respond to specific macro-prudential policies. Controlling for endogeneity, we find that measures aimed at borrowers––caps on debt-to-income and loan-to-value ratios––and at financial institutions––limits on credit growth and foreign currency lending––are effective in reducing asset growth. Countercyclical buffers are little effective through the cycle, and some measures are even counterproductive during downswings, serving to aggravate declines, consistent with the ex-ante nature of macro-prudential tools.

Author : Jacek Osinski
Publisher : International Monetary Fund
ISBN 13 : 1484369998
Total Pages : 28 pages
Book Rating : 4.99/5 ( download)

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Download or read book Macroprudential and Microprudential Policies written by Jacek Osinski and published by International Monetary Fund. This book was released on 2013-06-21 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: Effective arrangements for micro and macroprudential policies to further overall financial stability are strongly desirable for all countries, emerging or advanced. Both policies complement each other, but there can also be potential areas of overlap and conflict, which can complicate this cooperation. Organizing their very close interactions can help contain these potential tensions. This note clarifies the essential features of macroprudential and microprudential policies and their interactions, and delineates their borderline. It proposes mechanisms for aligning both policies in the pursuit of financial stability by identifying those elements that are desirable for effective cooperation between them. The note provides general guidance. Actual arrangements will need take into account country-specific circumstances, reflecting the fact that that there is no “one size fits all.”

Author : International Monetary Fund. Fiscal Affairs Dept.
Publisher : International Monetary Fund
ISBN 13 : 1498341705
Total Pages : 62 pages
Book Rating : 4.07/5 ( download)

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Download or read book Key Aspects of Macroprudential Policy written by International Monetary Fund. Fiscal Affairs Dept. and published by International Monetary Fund. This book was released on 2013-10-06 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: The crisis has underscored the costs of systemic instability at both the national and the global levels and highlighted the need for dedicated macroprudential policies to achieve financial stability. Building on recent advances, this paper provides a framework to inform the IMF’s country-specific advice on macroprudential policy. It recognizes that developing macroprudential policy is a work in progress, and addresses key issues to help ensure its effectiveness.

Author : Mr.Stijn Claessens
Publisher : International Monetary Fund
ISBN 13 : 1498340938
Total Pages : 38 pages
Book Rating : 4.39/5 ( download)

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Download or read book An Overview of Macroprudential Policy Tools written by Mr.Stijn Claessens and published by International Monetary Fund. This book was released on 2014-12-11 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: Macroprudential policies – caps on loan to value ratios, limits on credit growth and other balance sheets restrictions, (countercyclical) capital and reserve requirements and surcharges, and Pigouvian levies – have become part of the policy paradigm in emerging markets and advanced countries alike. But knowledge is still limited on these tools. Macroprudential policies ought to be motivated by market failures and externalities, but these can be hard to identify. They can also interact with various other policies, such as monetary and microprudential, raising coordination issues. Some countries, especially emerging markets, have used these tools and analyses suggest that some can reduce procyclicality and crisis risks. Yet, much remains to be studied, including tools’ costs ? by adversely affecting resource allocations; how to best adapt tools to country circumstances; and preferred institutional designs, including how to address political economy risks. As such, policy makers should move carefully in adopting tools.

Author : Mr.Nicolas Arregui
Publisher : International Monetary Fund
ISBN 13 : 1484335724
Total Pages : 73 pages
Book Rating : 4.27/5 ( download)

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Download or read book Evaluating the Net Benefits of Macroprudential Policy written by Mr.Nicolas Arregui and published by International Monetary Fund. This book was released on 2013-07-17 with total page 73 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper proposes a simple, new, analytical framework for assessing the cost and benefits of macroprudential policies. It proposes a measure of net benefits in terms of parameters that can be estimated: the probability of crisis, the loss in output given crisis, policy effectiveness in bringing down both the probability and damage during crisis, and the output-cost of a policy decision. It discusses three types of policy leakages and identifies instruments that could best minimize the leakages. Some rules of thumb for policymakers are provided.

Author : Mr.Eugenio Cerutti
Publisher : International Monetary Fund
ISBN 13 : 1498316379
Total Pages : 43 pages
Book Rating : 4.78/5 ( download)

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Download or read book The Use and Effectiveness of Macroprudential Policies written by Mr.Eugenio Cerutti and published by International Monetary Fund. This book was released on 2015-03-17 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a recent IMF survey and expanding on previous studies, we document the use of macroprudential policies for 119 countries over the 2000-13 period, covering many instruments. Emerging economies use macroprudential policies most frequently, especially foreign exchange related ones, while advanced countries use borrower-based policies more. Usage is generally associated with lower growth in credit, notably in household credit. Effects are less in financially more developed and open economies, however, and usage comes with greater cross-border borrowing, suggesting some avoidance. And while macroprudential policies can help manage financial cycles, they work less well in busts.