Macroprudential Policy: What Instruments and How to Use Them? Lessons from Country Experiences

By C. Lim, A. Costa, F. Columba, P. Kongsamut, Akira Otani, M. Saiyid, Torsten Wezel, Xiaoyong Wu. Social Science Research Network, 2011

616 citations recorded by the source corpus.

This paper provides the most comprehensive empirical study of the effectiveness of macroprudential instruments to date. Using data from 49 countries, the paper evaluates the effectiveness of macroprudential instruments in reducing systemic risk over time and across institutions and markets. The analysis suggests that many of the most frequently used instruments are effective in reducing pro-cyclicality and the effectiveness is sensitive to the type of shock facing the financial sector. Based on these findings, the paper identifies conditions under which macroprudential policy is most likely to be effective, as well as conditions under which it may have little impact.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/9b36d68e788af57f36c8019486e6ff5f46f8d2ad

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Citations in the corpus

Comparative assessment of macroprudential policies (2015, methodology): “Fourth, most cross-sectional studies investigating the impact of MaPPs on domestic credit nd that certain types of measures have a measurable impact during booms (Borio and Shim (2007), Lim et al (2011) and Tovar et al (2012)).”
Macro-Prudential Policies to Mitigate Financial System Vulnerabilities (2013, background): “For example, Lim et al. (2011) explore the role of MaPP on affecting credit and leverage growth, while Crowe et al. (2011) explore the effects of MaPP like LTVs on real estate booms and busts.”
Macroprudential and monetary policies: Implications for financial stability and welfare (2014, background): “3 More world results are available in Lim et al. (2011).”
Changes in Prudential Policy Instruments - A New Cross-Country Database (2016, methodology): “Our database represents further progress in recent efforts to measure the use of prudential tools across a large number of countries (e.g., Lim et al., 2011; Zhang and Zoli, 2014; Cerutti, Claessens, and Laeven, 2015; Aysan et al., 2015).”
Can non-interest rate policies stabilize housing markets? Evidence from a panel of 57 economies (2016, methodology): “…approach, Claessens et al. (2013) analyzed the use of macroprudential policy aimed at reducing vulnerabilities in individual banks in both advanced and emerging market economies, using a sample of about 2,300 banks in 48 countries and macroprudential policy measures documented by Lim et al. (2011).”
Macroprudential policy and bank systemic risk (2020, positive): “This database has several advantages compared to existing databases (for example the IMF database as used in Lim et al. (2011), the BIS database as used in Kuttner and Shim (2016), the GMPI database as used in Cerutti et al. (2017) and the iMaPP database as used in Alam et al. (2019)).”
The Regulatory Responses to the Global Financial Crisis: Some Uncomfortable Questions (2014, background): “Some of these have been studied (see for example, Lim et al., 2011, for the effectiveness of various macroprudential tools in a cross-country context; Crowe et al., 2011, on the use of macroprudential policies for mitigating real estate booms and busts; and Claessens, Ghosh and Mihet, 2013, for…”
Macroprudential policy and bank risk (2018, methodology): “Annex B: Additional details on the construction of the database on macroprudential tools Our primary data sources for macroprudential measures are Shim et al (2013) and Lim et al (2011, 2013).”
How Effective are Macroprudential Policies? An Empirical Investigation (2017, background): “Most empirical work on the subject relies on the 2011 IMF survey data presented in Lim et al. (2011). Using this database, Lim et al.”
Capital Inflows, Exchange Rate Flexibility, and Credit Booms (2011, neutral): “See Ashvin and Nabar (2011), Lim et al. (2011) and Terrier et al. (2011).”
Macroprudential Policies and Housing Prices-A New Database and Empirical Evidence for Central, Eastern, and Southeastern Europe (2012, background): “The results of Tovar et al. (2012)’s and Lim et al. (2011)’s event analyses are consistent with the econometric results mentioned above.”