Macroprudential Policy and Financial Stability in the Arab Region
IMF Working Papers, May 20, 2016
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Bibliographic details
- Authors: Ananthakrishnan Prasad, Heba Abdel Monem, Pilar Garcia Martinez
- Published: May 20, 2016
- Series: IMF Working Papers
Summary
- Several characteristics of the structure of the Arab economies, their economic policy framework, and their banking systems make macroprudential policy a particularly relevant tool.
- For most oil exporters, heavy reliance on the extractive sector for generating fiscal revenues and export earnings translates into increased vulnerabilities to oil price shocks.
- For oil importers, relatively small external and fiscal buffers make them highly vulnerable to shocks.
- This paper discusses the experience of Arab countries in implementing macroprudential policies and contains recommendations to strengthen their macroprudential framework.
Major findings and analysis
- Structural and institutional features increase the relevance of macroprudential policy in the Arab region, notably:
- Dependence on the extractive sector in oil exporters, creating vulnerability to oil price shocks.
- Limited external and fiscal buffers in oil importers, raising vulnerability to shocks.
- The paper documents experiences of Arab countries in implementing macroprudential policies (detailed country experiences and instruments are described in the full paper).
Policy recommendations (as indicated by the overview)
- Strengthen macroprudential frameworks in Arab countries to address vulnerabilities arising from:
- Commodity-price exposures in oil-exporting economies.
- Limited buffers and external vulnerability in oil-importing economies.
- Enhance the use of macroprudential instruments tailored to banking system structures and domestic policy frameworks (the full paper contains specific instrument-level recommendations).
Publication and metadata
- Title: Macroprudential Policy and Financial Stability in the Arab Region
- Authors: Ananthakrishnan Prasad, Heba Abdel Monem, Pilar Garcia Martinez
- Date: May 20, 2016
- Series: Working Paper No. 2016/098
- Issue: 098
- Volume: 2016
- Pages: 57
- Stock No: WPIEA2016098
- ISBN: 9781484361641
- ISSN: 1018-5941
- Subject tags: Banking; Credit; Financial sector policy and analysis; Financial sector stability; Macroprudential policy; Macroprudential policy instruments; Money; Systemic risk
- Keywords: a number of central banks, banking sector, capital market, capital market authority, countries central banks, credit, Financial sector stability, financial stability, FX loan, Global, legal reserve, liquidity level, liquidity regulation, liquidity window, Macroprudential policy, Macroprudential policy instruments, market cap, monetary policy independence, price index, private sector, supervisory function, systemic risk, WP
IMF Working Papers — Macroprudential Policy and Financial Stability in the Arab Region (Working Paper No. 2016/098), May 20, 2016