What Have We Learnt About the International Transmission of Monetary Policy in Recent Years? Perspectives from Hong Kong SAR

14 Pages Posted: 7 Oct 2014

Date Written: August 2014

Abstract

This paper discusses how the unconventional monetary policies in advanced economies have impacted Hong Kong SAR through the financial channel. Following the 2008–09 global financial crisis, the monetary expansion in advanced economies has led to extremely loose liquidity conditions on a global scale and caused significant spillovers to Hong Kong SAR through the channels of interest rate diffusion and capital flows. Credit and household indebtedness have grown at a fast pace as a result, while home prices have risen to highly stretched levels. These developments have increased the risk of a build-up of macrofinancial vulnerability in Hong Kong SAR. To guard against and mitigate these spillovers, the Hong Kong SAR authorities have introduced various types of macroprudential measures targeting credit growth and the property market. Evidence from the available research suggests that these measures have helped safeguard financial stability and have influenced loan growth, interest costs, property market transactions and speculative activity.

Full publication: The Transmission of Unconventional Monetary Policy to the Emerging Markets

Keywords: International transmission channels, macroprudential policy, financial stability, Hong Kong SAR, global financia l crisis, unconventional monetary policies

JEL Classification: E51, E61, G18, G28

Suggested Citation

Monetary Authority, Hong Kong, What Have We Learnt About the International Transmission of Monetary Policy in Recent Years? Perspectives from Hong Kong SAR (August 2014). BIS Paper No. 78k, Available at SSRN: https://ssrn.com/abstract=2499782

Hong Kong Monetary Authority (Contact Author)

Hong Kong Monetary Authority

3 Garden Road, 30th Floor
Hong Kong
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