The Macroprudential Framework: Policy Responsiveness and Institutional Arrangements

41 Pages Posted: 8 Aug 2013

See all articles by Cheng Hoon Lim

Cheng Hoon Lim

International Monetary Fund (IMF)

Ivo Krznar

International Monetary Fund (IMF)

Fabian Lipinsky

International Monetary Fund (IMF)

A. Otani

International Monetary Fund (IMF)

X. Wu

International Monetary Fund (IMF)

Date Written: July 2013

Abstract

This paper gauges if, and how, institutional arrangements are correlated with the use of macroprudential policy instruments. Using data from 39 countries, the paper evaluates policy response time in various types of institutional arrangements for macroprudential policy and finds that the macroprudential framework that gives the central bank an important role is associated with more timely use of macroprudential policy instruments. Policymakers may also tend to use macroprudential instruments more quickly if the ability to conduct monetary policy is somehow constrained. This finding points to the importance of coordination between macroprudential and monetary policy.

Keywords: Macroprudential Policy, Financial stability, Central banks, Monetary policy, Central bank role, macroprudential, institutions, instruments, systemic risk, credit, interest rate., mortgage, central bank, reserve requirement, reserve requirements, mortgage loans, mortgages, monetary fund, housing loans, monetary policy, reserve ratios, liquidity ratio, residential mortgage, residential mortgages, mortgage loan, home equity loans, mortgage lending, home equity, monetary policies, mortgage interest, minimum reserve requirement, marginal reserve requirement, mortgage rates, mortgage regulation, government securities, mortgage interest rates, housing loan, mortgage servicing, inflation, second mor

JEL Classification: G28, E58

Suggested Citation

Lim, Cheng Hoon and Krznar, Ivo and Lipinsky, Fabian and Otani, Akira and Wu, Xiaoyong, The Macroprudential Framework: Policy Responsiveness and Institutional Arrangements (July 2013). IMF Working Paper No. 13/166. Available at SSRN: https://ssrn.com/abstract=2307408

Cheng Hoon Lim

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Ivo Krznar

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Fabian Lipinsky

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Akira Otani

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Xiaoyong Wu

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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