Macroprudential Policy Frameworks in Developing Asian Economies

45 Pages Posted: 12 Jun 2017

See all articles by Minsoo Lee

Minsoo Lee

Asian Development Bank

Raymond Elizarde Gaspar

Asian Development Bank

Mai Lin Villaruel

Asian Development Bank

Date Written: March 2017

Abstract

Over the last decade, developing Asia’s deeper global financial linkages have been accompanied by greater financial integration. As the region becomes more interconnected, a key priority is to ensure that the dynamic environment is supported by better coordinated and potentially consistent macroprudential policies to adequately control systemic risks. Within the context of global financial developments, this paper presents a general macroprudential policy framework that highlights important aspects to conducting policy. It also provides an overview of how some Asian economies, New Zealand, and the euro area implement their macroprudential policies. It reviews existing macroprudential policy frameworks of five high-growth developing economies — Cambodia, Mongolia, Myanmar, Sri Lanka, and Viet Nam — identifying improvements and continuing challenges for their financial systems, which will likely grow more complex. Identifying and addressing key issues will help improve their existing macroprudential policy frameworks.

Keywords: developing Asia, financial stability, macroprudential framework, systemic risk

JEL Classification: G01, G28, L51

Suggested Citation

Lee, Minsoo and Gaspar, Raymond Elizarde and Villaruel, Mai Lin, Macroprudential Policy Frameworks in Developing Asian Economies (March 2017). Asian Development Bank Economics Working Paper Series No. 510. Available at SSRN: https://ssrn.com/abstract=2982876 or http://dx.doi.org/10.2139/ssrn.2982876

Minsoo Lee (Contact Author)

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Raymond Elizarde Gaspar

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Mai Lin Villaruel

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

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