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Macroprudential Policy: What Does It Really Mean

Author

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  • Lopez, Claude
  • Markwardt, Donald
  • Savard, Keith

Abstract

As many central banks contemplate the normalization of monetary policy, their focus is turning to the promise of macroprudential policy as a tool to manage possible future systemic risk in financial markets. Janet Yellen and Mario Draghi, among others, are pinning much of their hopes for managing financial stability in the context of Basel III on macroprudentialism. Despite central banks’ clear intention that this policy will play a significant role in developed economies, few policymakers or financial players know what macroprudential policy is, much less how to assess its efficacy or necessity. The paper is a shorter version of a report on the same subject. It aims to clarify the concept of macroprudential policy for a broader audience, cultivating a better understanding of these tools and their implications for broader monetary policy going forward.

Suggested Citation

  • Lopez, Claude & Markwardt, Donald & Savard, Keith, 2015. "Macroprudential Policy: What Does It Really Mean," MPRA Paper 68157, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:68157
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    File URL: https://mpra.ub.uni-muenchen.de/68157/1/MPRA_paper_68157.pdf
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    References listed on IDEAS

    as
    1. Viral V. Acharya & Lasse H. Pedersen & Thomas Philippon & Matthew Richardson, 2017. "Measuring Systemic Risk," The Review of Financial Studies, Society for Financial Studies, vol. 30(1), pages 2-47.
    2. Drehmann, Mathias & Juselius, Mikael, 2014. "Evaluating early warning indicators of banking crises: Satisfying policy requirements," International Journal of Forecasting, Elsevier, vol. 30(3), pages 759-780.
    3. Artak Harutyunyan & Mr. Alexander Massara & Giovanni Ugazio & Goran Amidžic & Richard Walton, 2015. "Shedding Light on Shadow Banking," IMF Working Papers 2015/001, International Monetary Fund.
    4. Shekhar Aiyar & Charles W. Calomiris & Tomasz Wieladek, 2014. "Does Macro‐Prudential Regulation Leak? Evidence from a UK Policy Experiment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 46(s1), pages 181-214, February.
    5. repec:fip:fedhpr:y:2010:i:may:p:65-71 is not listed on IDEAS
    6. Lopez, Claude & Markwardt, Donald & Savard, Keith, 2015. "Macroprudential Policy: A Silver Bullet or Refighting the Last War?," MPRA Paper 64499, University Library of Munich, Germany.
    7. Eugenio Cerutti & Stijn Claessens & Luc Laeven, 2016. "The use and effectiveness of macroprudential policies," BIS Papers chapters, in: Bank for International Settlements (ed.), Macroprudential policy, volume 86, pages 95-102, Bank for International Settlements.
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    Cited by:

    1. Lopez, Claude & Markwardt, Donald & Savard, Keith, 2016. "The Asset Management Industry and Systemic Risk: Is There a Connection?," MPRA Paper 72266, University Library of Munich, Germany.
    2. lopez, claude & Saeidinezhad, Elham, 2016. "Dodd-Frank: Washington, We Have a Problem," MPRA Paper 72236, University Library of Munich, Germany.

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    More about this item

    Keywords

    Macroprudential; Systemic Risk;

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • F3 - International Economics - - International Finance

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