Effective Macroprudential Policy: Cross‐Sector Substitution from Price and Quantity Measures

By J. Cizel, Jon Frost, A. Houben, Peter Wierts. Journal of Money, Credit and Banking, 2016

127 citations recorded by the source corpus.

Macroprudential policy is increasingly being implemented worldwide. Key questions are its effectiveness in influencing bank credit and substitution effects beyond banking. Our results confirm the expected effects of macroprudential policies on bank credit, both for advanced economies and emerging market economies. But results also confirm substitution effects towards non-bank credit, especially in advanced economies, reducing the policies' effect on total credit. Quantity restrictions are particularly potent in constraining bank credit but also cause the strongest substitution effects. Policy implications indicate a need to extend macroprudential policy beyond banking, especially in advanced economies.

Subfields: Finance, Information Systems

View Paper: https://www.semanticscholar.org/paper/57295ef02636252a4f80ef2b2760dac6c8b5c416

Citations in the corpus

• Macroprudential policy and bank systemic risk (2020, unknown): “…types of loans or to certain types of counterparties, banks may avoid the regulation by reallocating credit or increase their exposure to other asset classes that are not subject to the regulation (as also found by Cizel et al., 2016, Aiyar et al., 2014 and Cerutti et al., 2017 among others).”