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Macroprudential Regulations in Andean Countries

Author

Listed:
  • Arturo J. Galindo
  • Liliana Rojas-Suarez
  • Marielle del Valle

Abstract

Together with a handful of countries at the global level, a number of economies in the Andean region stand out by their innovative and rapid advances in the design and implementation of macroprudential financial regulations, that is, regulations that take into account financial risks generated at the systemic level. This paper focuses on three regulatory tools utilized in the region: countercyclical capital requirements, countercyclical loan-loss provisioning requirements, and liquidity requirements. In each case, the specifics of the policy instrument is described and compared across countries. Among the Andean countries, Colombia and Peru have been the most active in terms of implementation of countercyclical macroprudential regulations.

Suggested Citation

  • Arturo J. Galindo & Liliana Rojas-Suarez & Marielle del Valle, 2013. "Macroprudential Regulations in Andean Countries," Working Papers 319, Center for Global Development.
    • Handle: RePEc:cgd:wpaper:319
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    File URL: http://www.cgdev.org/files/1427048_file_Rojas_Suarez_Macroprudential_Andean.pdf
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    References listed on IDEAS

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    1. Santiago Fernández de Lis & Alicia Garcia-Herrero, 2010. "Dynamic provisioning: Some lessons from existing experiences," Working Papers 1014, BBVA Bank, Economic Research Department.
    2. Enrique G. Mendoza & Marco E. Terrones, 2008. "An Anatomy Of Credit Booms: Evidence From Macro Aggregates And Micro Data," NBER Working Papers 14049, National Bureau of Economic Research, Inc.
    3. Liliana Rojas-Suarez, Arturo J. Galindo, and Marielle del Valle, 2012. "Capital Requirements under Basel III in Latin America: The Cases of Bolivia, Colombia, Ecuador and Peru - Working Paper 296," Working Papers 296, Center for Global Development.
    4. Claessens, Stijn & Kose, M. Ayhan & Terrones, Marco E., 2012. "How do business and financial cycles interact?," Journal of International Economics, Elsevier, vol. 87(1), pages 178-190.
    5. Torsten Wezel, 2010. "Dynamic Loan Loss Provisions in Uruguay: Properties, Shock Absorption Capacity and Simulations Using Alternative Formulas," IMF Working Papers 2010/125, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Saurabh Ghosh, 2015. "Building on the Countercyclical Consensus: An Empirical Test," Working Papers wp08, South East Asian Central Banks (SEACEN) Research and Training Centre.

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    More about this item

    Keywords

    macroprudential regulation; monetary policy; financial stability; Latin America; Andean countries;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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