Macro-Prudential Policies to Mitigate Financial System Vulnerabilities
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TLDR
In this article, the authors analyze how changes in balance sheets of some 2800 banks in 48 countries over 2000-2010 respond to specific macro-prudential policies, and find that measures aimed at borrowers such as caps on debt to income and loan-to-value ratios, and limits on credit growth and foreign currency lending are effective in reducing leverage, asset and noncore to core liabilities growth during boom times.About:
This article is published in Journal of International Money and Finance.The article was published on 2013-12-01 and is currently open access. It has received 404 citations till now. The article focuses on the topics: Leverage (finance) & Balance sheet.read more
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A Macroprudential Approach to Financial Regulation
TL;DR: In this paper, a detailed vision for how a macro-prudential regime might be designed is presented, based on a specific theory of how modern financial crises unfold and why both an unregulated financial system, as well as one based on capital rules that only apply to traditional banks, is likely to be fragile.
Posted Content
The Use and Effectiveness of Macroprudential Policies: New Evidence
TL;DR: Using a recent IMF survey and expanding on previous studies, the authors document the use of macro-prudential policies for 119 countries over the 2000-13 period, covering many instruments.
Journal ArticleDOI
The use and effectiveness of macroprudential policies: New evidence
TL;DR: Using a recent IMF survey and expanding on previous studies, this article document the use of macro-prudential policies for 119 countries over the 2000-2013 period, covering many instruments.
Journal ArticleDOI
How effective are macroprudential policies? An empirical investigation
Ozge Akinci,Jane Olmstead-Rumsey +1 more
TL;DR: In this article, the authors construct an index of macro-prudential policies in 57 advanced and emerging economies covering the period from 2000:Q1 to 2013:Q4, with tightenings and easings recorded separately.
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An Overview of Macroprudential Policy Tools
TL;DR: Macro-prudential policies, such as caps on loan to value ratios, limits on credit growth and other balance-sheet restrictions, countercyclical capital and reserve requirements and surcharges, and Pigouvian levies, have become part of the policy paradigm in emerging markets and developed countries alike as discussed by the authors.
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Market liquidity and funding liquidity
TL;DR: In this article, the authors provide a model that links an asset's market liquidity and traders' funding liquidity, i.e., the ease with which they can obtain funding, to explain the empirically documented features that market liquidity can suddenly dry up, has commonality across securities, is related to volatility, is subject to flight to quality, and comoves with the market.
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Market Liquidity and Funding Liquidity
TL;DR: In this article, the authors provide a model that links a security's market liquidity and traders' funding liquidity, i.e., their availability of funds, to explain the empirically documented features that market liquidity can suddenly dry up (i) is fragile), (ii) has commonality across securities, (iii) is related to volatility, and (iv) experiences “flight to liquidity” events.
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A New Measure of Financial Openness
Menzie D. Chinn,Hiro Ito +1 more
TL;DR: In this paper, a new index is proposed to measure the extent of openness in cross-border financial transactions, based on the information from the IMF's Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER).
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Liquidity and Leverage
Tobias Adrian,Hyun Song Shin +1 more
TL;DR: In a financial system in which balance sheets are continuously marked to market, asset price changes appear immediately as changes in net worth, eliciting responses from financial intermediaries who adjust the size of their balance sheets as mentioned in this paper.
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Liquidity and Leverage
Tobias Adrian,Hyun Song Shin +1 more
TL;DR: In this article, the authors show that marked-to-market lever-age is strongly procyclical and that changes in aggregate balance sheets for intermediaries forecast changes in risk appetite in financial markets, as measured by the innovations in the VIX index.