The Use and Effectiveness of Macroprudential Policies: New Evidence

By Eugenio M Cerutti, Stijn Claessens, Luc Laeven

March 17, 2015

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Eugenio M Cerutti, Stijn Claessens, and Luc Laeven. The Use and Effectiveness of Macroprudential Policies: New Evidence, (USA: International Monetary Fund, 2015) accessed September 19, 2024

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

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.

Subject: Central bank policy rate, Credit, Emerging and frontier financial markets, Financial markets, Financial sector policy and analysis, Financial services, Housing prices, Macroprudential policy, Money, Prices

Keywords: Capital account, Central bank policy rate, Credit, Credit growth, Dependent variable, Effectiveness, Emerging and frontier financial markets, Exchange rate, Financial cycles, Foreign currency, Global, Housing prices, Macroprudential policies, Macroprudential policy, MPI index, Open economy, Procyclicality, Prudential policy, Regression result, Standard deviation, WP

Publication Details

Pages:

43
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/061
Stock No:

WPIEA2015061
ISBN:

9781498321051
ISSN:

1018-5941

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