Will macroprudential policy counteract monetary policy’s effects on financial stability?
"How does monetary policy impact upon macroprudential regulation? This paper models monetary policy’s transmission to bank risk taking, and its interaction with a regulator’s optimization problem. The regulator uses its macroprudential tool, a leverage ratio, to maintain financial stability, w...
| Main Authors: | , |
|---|---|
| Institution: | ETUI-European Trade Union Institute |
| Format: | TEXT |
| Language: | English |
| Published: |
Brussels
2018
Bruegel |
| Subjects: | |
| Online Access: | https://www.labourline.org/KENTIKA-19398968124911161409-Will-macroprudential-policy-co.htm |
| _version_ | 1771659898177716224 |
|---|---|
| author | Agur, Itai Demertzis, Maria |
| author_facet | Agur, Itai Demertzis, Maria |
| collection | Library items |
| description | "How does monetary policy impact upon macroprudential regulation? This paper models monetary policy’s transmission to bank risk taking, and its interaction with a regulator’s optimization problem.
The regulator uses its macroprudential tool, a leverage ratio, to maintain financial stability, while taking account of the impact on credit provision. A change in the monetary policy rate tilts the regulator’s entire trade-off. The authors show that the regulator allows interest rate changes to partly “pass through” to bank soundness by not neutralizing the risk-taking channel of monetary policy. Thus, monetary policy affects financial stability, even in the presence of macroprudential regulation." |
| format | TEXT |
| id | 19398968124911161409_017908f5764342e6b00d601c3d37cce5 |
| institution | ETUI-European Trade Union Institute |
| is_hierarchy_id | 19398968124911161409_017908f5764342e6b00d601c3d37cce5 |
| is_hierarchy_title | Will macroprudential policy counteract monetary policy’s effects on financial stability? |
| language | English |
| physical | 26 p. Digital |
| publishDate | 2018 |
| publisher | Brussels Bruegel |
| spellingShingle | Agur, Itai Demertzis, Maria monetary policy regulation stability financial policy Will macroprudential policy counteract monetary policy’s effects on financial stability? |
| thumbnail | https://www.labourline.org/Image_prev.jpg?Archive=132235795041 |
| title | Will macroprudential policy counteract monetary policy’s effects on financial stability? |
| topic | monetary policy regulation stability financial policy |
| url | https://www.labourline.org/KENTIKA-19398968124911161409-Will-macroprudential-policy-co.htm |