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Behavioural finance and the macroprudential dimension

Author

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  • Joanna Gray

    (Birmingham Law School, University of Birmingham)

Abstract

This article poses the question whether the insights of behavioural research in finance could inform use of the macroprudential toolkit to be employed in order to counter risk to the financial system and promote stability with in financial markets. It concludes that our understanding of the interplay between micro behaviours in financial markets and macro effects in terms of financial stability is still at too rudimentary stage to offer much clear guidance in legal and regulatory design in use of the new macroprudential instruments.

Suggested Citation

  • Joanna Gray, 2016. "Behavioural finance and the macroprudential dimension," Journal of Banking Regulation, Palgrave Macmillan, vol. 17(4), pages 296-310, November.
    • Handle: RePEc:pal:jbkreg:v:17:y:2016:i:4:d:10.1057_jbr.2015.27
    DOI: 10.1057/jbr.2015.27
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    References listed on IDEAS

    as
    1. Piet Clement, 2010. "The term “macroprudential”: origins and evolution," BIS Quarterly Review, Bank for International Settlements, March.
    2. Gai, Prasanna & Haldane, Andrew & Kapadia, Sujit, 2011. "Complexity, concentration and contagion," Journal of Monetary Economics, Elsevier, vol. 58(5), pages 453-470.
    3. Robert Grosse, 2012. "Bank regulation, governance and the crisis: a behavioral finance view," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 20(1), pages 4-25, February.
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    Cited by:

    1. Yiannis Anagnostopoulos & Jackie Kabeega, 2019. "Insider perspectives on European banking challenges in the post-crisis regulation environment," Journal of Banking Regulation, Palgrave Macmillan, vol. 20(2), pages 136-158, June.

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