Towards Effective Macroprudential Policy Frameworks: An Assessment of Stylized Institutional Models

 
Author/Editor: Nier, Erlend ; Osinski, Jacek ; Jácome, Luis Ignacio ; Madrid, Pamela
 
Publication Date: November 01, 2011
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: A number of countries are reviewing their institutional arrangements for financial stability to support the development of a macroprudential policy function. In some cases, this involves a rethink of the appropriate institutional boundaries between central banks and financial regulatory agencies, or the setting up of dedicated policymaking committees. In others, efforts are underway to enhance cooperation within the existing institutional structure. Against this background, this paper provides basic guidance for the design of effective arrangements, in a manner that can provide a framework for country-specific advice. After reviewing briefly the main institutional elements of existing and emerging macroprudential policy frameworks across countries, the paper identifies stylized institutional models based on key features that distinguish institutional arrangements. It develops criteria to assess the effectiveness of models, examines the strengths and weaknesses of models against these criteria, and explores ways to improve existing setups. The paper finally distills lessons and sets out desired principles for effective macroprudential policy arrangements.
 
Series: Working Paper No. 11/250
Subject(s): Cross country analysis | Economic models | Fiscal policy | Governance | Monetary policy

Author's Keyword(s): macroprudential policy | institutions | governance
 
English
Publication Date: November 01, 2011
Format: Paper
Stock No: WPIEA2011250 Pages: 51
Price:
US$18.00 (Academic Rate:
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