The financial crisis has signalized the need to reconsider the former micro approach to regulation and supervision of financial institutions. While in the past there was much debate on the scope of micro-prudential supervision on individual banks, there was little debate on macro-prudential supervision to secure the financial system. To achieve this goal an interplay of microprudential and macroprudential authority is needed to identify systemic risks as a key factor of financial stability and verify financial regulation from a systemic risk perspective.
The macroprudential approach focuses on risks arising in foreign financial markets and the impact of financial distress on important financial institutions. The key aspects of current regulatory reforms include measuring and regulating systemic risk, as well as designing macroprudential policies as a tool to manage possible future systemic risk. Currently is questioned how to design an effective macroprudential regulatory framework that achieves the financial stability objective corresponding to microprudential and monetary policy.
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Special Issue of the International Journal of Central Banking on International Prudential Policy Spillovers: Volume 13, Supplement 1, March 2017.
Working and discussion papers
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Beirne, J., and C. Friedrich (2014). Capital flows and macroprudential policies – A multilateral assessment of effectiveness and externalities. Bank of Canada Working Paper 2014-31.
Buch, C., and L. Goldberg (2016). Cross-Border Prudential Policy Spillovers: How Much? How Important? Evidence from the International Banking Research Network. NBER Working Paper No. 22874.
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Cerutti, E.M., and H. Zhou (2018). Cross-border Banking and the Circumvention of Macroprudential and Capital Control Measures. IMF Working Paper No. 18/217.
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Darracq Pariès, M., C. Kok, E. Rancoita (2019). Macroprudential policy in a monetary union with cross-border banking. ECB Working Paper No. 2260.
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Dutra Araujo, J., M. Patnam, A. Popescu, F. Valencia, and W. Yao (2020). Effects of Macroprudential Policy: Evidence from Over 6,000 Estimates. IMF Working Paper 20/67.
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Fabiani, A., M. López Piñeros, J.L. Peydró, and P. E. Soto (2021). Capital Controls, Domestic Macroprudential Policy and the Bank Lending Channel of Monetary Policy. CEPR Discussion Paper No. 16510
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Lagos, R., S. Zhang (2019). The Limits of Monetary Economics: On Money as a Medium of Exchange in Near-Cashless Credit Economies. CEPR Discussion Papers No. 14057.
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Müller K. (2019). Electoral Cycles in Macroprudential Regulation. Working Paper, Princeton University.
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Pedrono, J. (2017). International integration, currency diversification and banking stability. Aix-Marseille School of Economics Working Paper.
Richter, B., M. Schularick, and I. Shim (2018). The Costs of Macroprudential Policy. NBER Working Paper No. 24989.
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Schoenmaker, D. (2012). The missing link in banking union: Macro-Prudential supervision. DSF Policy Briefs.
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Takáts, E., and J. Temesvary (2019). How does the interaction of macroprudential and monetary policies affect cross-border bank lending? BIS Working Paper No. 782.
Angelini, P., S. Nicoletti-Altimari, and I. Visco (2012). Macroprudential, microprudential and monetary policies: conflicts, complementarities and trade-offs. Banca D’Italia Occasional Papers 140.
Bank of England (2011). Instruments of macroprudential policy: A discussion paper.
Banque de France (2014). Macroprudential policies: implementation and interactions. Financial Stability Review No. 18.
Bruno, V., I. Shim and H. S. Shin (2015). Effectiveness of macroprudential and capital flow measures in Asia and the Pacific. BIS Papers No 82.
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