The IMF staff (Benes et al. 2014) recently unveiled a new model that “has been developed at the IMF to support macrofinancial and macroprudential policy analysis”. In introducing the model they argue that “such new analytical frameworks require a major revamp of the conventional linear dynamic stochastic general equilibrium (DSGE) models”. We agree with Benes et al.
Making macroprudential regulation operational
Anil K Kashyap , Dimitri Tsomocos, Alexandros Vardoulakis, 18 July 2014
It’s time to deploy macroprudential policy: results from the Centre for Macroeconomics July Survey
Angus Armstrong, Francesco Caselli, Jagjit Chadha, Wouter den Haan, 8 July 2014
The Centre for Macroeconomics (CFM) – an ESRC-funded research centre including the University of Cambridge, the London School of Economics (LSE), University College London (UCL) and the National Institute of Economic and Social Research (NIESR) – is today publishing the results of its fourth monthly survey.1 The surveys are designed to inform the public
Model risk and the implications for risk management, macroprudential policy, and financial regulations
Jon Danielsson, Kevin James, Marcela Valenzuela, Ilknur Zer, 8 June 2014
Risk forecasting is central to macroprudential policy, financial regulations, and the operations of financial institutions. Therefore, the accuracy of risk forecast models – model risk analysis – should be a key concern for the users of such models. Surprisingly, this does not appear to be the case.
Capital controls in the 21st century
Barry Eichengreen, Andrew K Rose, 5 June 2014
Capital controls are back. The IMF (2012) has softened its earlier opposition to their use. Some emerging markets – Brazil, for example – have made renewed use of controls since the global financial crisis of 2008–2009.
Estimating the impact of changes in aggregate bank capital requirements during an upswing
Joseph Noss, Priscilla Toffano, 6 April 2014
The recent financial crisis and economic contraction that followed highlighted the crucial role that banks play in facilitating the extension of credit and enabling economic growth. This underlies the economic rationale for imposing regulations on the banking industry, including minimum capital requirements designed to mitigate risks banks would not otherwise account for in their behaviour.
How much is enough? The case of the Resolution Fund in Europe
Thomas Huertas, María J Nieto, 18 March 2014
During the crisis, individual institutions such as Hypo Real Estate required public assistance of €100 billion or more.1 So how can a European Resolution Fund of only €55 billion possibly suffice for all banks in the Eurozone?
Topics: EU institutions, Financial markets, International finance
Tags: bail-in, bank resolution, banking, European Resolution Fund, eurozone, Macroprudential policy, microprudential regulation, regulation, systemic risk
The interaction between monetary and macroprudential policies
Stijn Claessens, Fabian Valencia, 14 March 2013
In the decades prior to the crisis, macroeconomic management evolved to assign a strong role to monetary policy, with a primary focus on price stability. The framework of monetary policy was broadly converging toward one with an inflation target (explicit or implicit) and a short-term interest rate as a tool (Blanchard, Dell’Ariccia and Mauro 2010).
Macroprudential supervision in banking union
Dirk Schoenmaker, 9 December 2012
There is a strong tendency to focus on the stability and soundness of individual banks. Supervisors may thus be bogged down by the details of these banks, while losing sight of emerging imbalances in the wider financial system.
Macroprudential policy: Economic rationale and optimal tools
Giovanni Favara, Lev Ratnovski, 6 August 2012
The purpose of macroprudential policy is to reduce ‘systemic risk’. While hard to define formally, systemic risk is understood as 'the risk of developments that threaten the stability of the financial system as a whole and consequently the broader economy” (Bernanke, 2009). The notion is meant to include the types of financial imbalances that led to the 2007-2008 bust.
Macroprudential policy: What instruments and how to use them? Lessons from country experiences
Francesco Columba, Alejo Costa, Cheng Hoon Lim, 16 March 2012
Macroprudential policy is quickly gaining traction in international circles as a useful tool to address system-wide risks in the financial sector (see for example Borio 2011, Galati and Moessner 2011, Viñals 2010, 2011). Yet the analytical and operational underpinnings of a macroprudential framework are not fully understood and the effectiveness of the instruments is uncertain.
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- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
Cadot, de Melo, 16 June 2014
CEPR Policy Research
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- Commodity and Equity Markets: Some Stylized Facts from a Copula ApproachDelatte, Lopez
- Ethnic Unemployment Rates and Frictional MarketsGobillon, Rupert, Wasmer
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- The euro in the 'currency war'Bénassy-Quéré, Martin
- The roots of shadow bankingPerotti
- What’s wrong with Europe?Baldini, Manasse
- Corporate Finance Theory Symposium19 - 20 September 2014 / Cambridge / Judge Business School, Cambridge University
- International Trade, Finance, and Macroeconomics: Research Frontiers and Challenges for Policy18 - 19 December 2014 / The Bank of England, London / The Bank of England, Centre for Macroeconomics and CEPR