Evaluating the Net Benefits of Macroprudential Policy: A Cookbook

 
Author/Editor: Nicolas Arregui ; Jaromir Benes ; Ivo Krznar ; Srobona Mitra ; Andre Santos
 
Publication Date: July 17, 2013
 
Electronic Access: Free Full text (PDF file size is 2,944KB).
Use the free Adobe Acrobat Reader to view this PDF file

 
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: 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.
 
Series: Working Paper No. 13/167
Subject(s): Macroprudential Policy | Financial sector | Financial risk | Financial crisis | Risk management

 
English
Publication Date: July 17, 2013
ISBN/ISSN: 9781484335727/2227-8885 Format: Paper
Stock No: WPIEA2013167 Pages: 73
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
Please address any questions about this title to publications@imf.org