Policy Instruments to Lean Against the Wind in Latin America
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Summary:
This paper reviews policy tools that have been used and/or are available for policy makers in the region to lean against the wind and review relevant country experiences using them. The instruments examined include: (i) capital requirements, dynamic provisioning, and leverage ratios; (ii) liquidity requirements; (iii) debt-to-income ratios; (iv) loan-to-value ratios; (v) reserve requirements on bank liabilities (deposits and nondeposits); (vi) instruments to manage and limit systemic foreign exchange risk; and, finally, (vii) reserve requirements or taxes on capital inflows. Although the instruments analyzed are mainly microprudential in nature, appropriately calibrated over the financial cycle they may serve for macroprudential purposes.
Series:
Working Paper No. 11/159
Subject:
Banking sector Capital controls Capital flows Capital requirements Central banks and their policies Cross country analysis Fiscal policy Foreign exchange Latin America Monetary policy Reserve requirements Risk management
English
Publication Date:
July 1, 2011
ISBN/ISSN:
9781455297726/1018-5941
Stock No:
WPIEA2011159
Format:
Paper
Pages:
113
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