How Effective are Macroprudential Policies in Asiapacific? Evidence from a Meta-Analysis

Abstract

This paper evaluates the effectiveness of macroprudential policies in five Asia-Pacific countries (Australia, Indonesia, New Zealand, the Philippines and Thailand). We use supervisory bank-level data and apply a common empirical strategy. We find that macroprudential policies are effective in reducing excessive household credit growth. Additionally, a tightening in macroprudential policy has a stronger effect than an easing. We also find that banks’ size and liquidity influence the effect of macroprudential policy on credit growth. Finally, macroprudential policy is effective in reducing bank risk as measured by the non-performing loan ratio.

Full Publication: Measuring the Effectiveness of Macroprudential Policies Using Supervisory Bank-Level Data

Keywords: macroprudential policy, household credit, bank-level data, meta-analysis

JEL Classification: E51, E58 G18, G28