How Might Macroprudential Capital Policy Affect Credit Conditions?

17 Pages Posted: 23 Sep 2014

Date Written: September 16, 2014

Abstract

Macroprudential capital policy is designed to make the financial system more resilient and reduce the likelihood and severity of financial crises. In doing so, it can have an impact on credit conditions and economic growth more generally. This article considers the effects on credit conditions over the near term. The direction and magnitude of those effects are likely to depend crucially on the state of the financial system and the economy as well as the way in which banks, financial investors and borrowers respond to changes in macroprudential capital policy.

Suggested Citation

Harimohan, Rashmi and Nelson, Benjamin, How Might Macroprudential Capital Policy Affect Credit Conditions? (September 16, 2014). Bank of England Quarterly Bulletin 2012 Q3, Available at SSRN: https://ssrn.com/abstract=2499420

Rashmi Harimohan (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Benjamin Nelson

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

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