The Role of Macroprudential Policy for Financial Stability in East Asia’s Emerging Economies

This review reexamines from a theoretical perspective the role of monetary and macroprudential policies in addressing the build-up of risks in the financial system. We construct a stylized general equilibrium model in which the key friction comes from a moral hazard problem in firms’ financing that banks’ equity capital serves to ameliorate. Tight monetary policy is introduced by open market sales of government debt, and tight macroprudential policy by an increase in capital requirements. We show that both policies are useful, but macroprudential policy is more effective in fostering financial stability and leads to higher social welfare.

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Income Growth-Financial Stability Nexus: The Role of Institutional Quality in Emerging Economies

10.7176/rjfa/12-14-08 ◽

2021 ◽

Keyword(s):

Emerging Economies ◽

Financial Stability ◽

Institutional Quality ◽

Income Growth

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Macroprudential Policy Instruments of Central Banks

Voprosy Ekonomiki ◽

10.32609/0042-8736-2012-8-32-47 ◽

2012 ◽

pp. 32-47

Author(s):

S. Andryushin ◽

V. Kuznetsova

Keyword(s):

Systemic Risk ◽

Financial Stability ◽

Financial System ◽

Policy Instruments ◽

Central Banks ◽

Macroprudential Policy ◽

Policy Studies ◽

The Future ◽

Financial Cycles

The paper analyzes central banks macroprudencial policy and its instruments. The issues of their classification, option, design and adjustment are connected with financial stability of overall financial system and its specific institutions. The macroprudencial instruments effectiveness is evaluated from the two points: how they mitigate temporal and intersectoral systemic risk development (market, credit, and operational). The future macroprudentional policy studies directions are noted to identify the instruments, which can be used to limit the financial systemdevelopment procyclicality, mitigate the credit and financial cycles volatility.

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On the Limits of Macroprudential Policy

The B E Journal of Macroeconomics ◽

10.1515/bejm-2018-0189 ◽

2020 ◽

Vol 0 (0) ◽

Author(s):

Marcin Kolasa

Keyword(s):

Monetary Policy ◽

Policy Instruments ◽

New Keynesian ◽

Output Volatility ◽

Macroprudential Policy ◽

Collateral Constraints ◽

Keynesian Model ◽

Additional Stabilization ◽

The Interest Rate

AbstractThis paper studies how macroprudential policy tools applied to the housing market can complement the interest rate-based monetary policy in achieving one additional stabilization objective, defined as keeping either economic activity or credit at some exogenous (and possibly time-varying) levels. We show analytically in a canonical New Keynesian model with housing and collateral constraints that using the loan-to-value (LTV) ratio, tax on credit or tax on property as additional policy instruments does not resolve the inflation-output volatility tradeoff. Perfect targeting of inflation and credit with monetary and macroprudential policy is possible only if the role of housing debt in the economy is sufficiently small. The identified limits to the considered policies are related to their predominantly intertemporal impact on decisions made by financially constrained agents, making them poor complements to monetary policy, which also operates at an intertemporal margin. These limits can be overcome if macroprudential policy is instead designed such that it sufficiently redistributes income between savers and borrowers.

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A room with a view: a special issue with a special perspective

Environment and Development Economics ◽

10.1017/s1355770x21000103 ◽

2021 ◽

Vol 26 (3) ◽

pp. 205-210

Author(s):

Simone Borghesi

Keyword(s):

Climate Change ◽

Developing Countries ◽

Climate Policy ◽

Present Article ◽

Emerging Economies ◽

Emissions Trading ◽

Developed Countries ◽

Special Issue ◽

Climate Policies

AbstractThe present article describes the main insights deriving from the papers collected in this special issue which jointly provide a ‘room with a view’ on some of the most relevant issues in climate policy such as: the role of uncertainty, the distributional implications of climate change, the drivers and applications of decarbonizing innovation, the role of emissions trading and its interactions with companion policies. While looking at different issues and from different angles, all papers share a similar attention to policy aspects and implications, especially in developing countries. This is particularly important to evaluate whether and to what extent the climate policies adopted thus far in developed countries can be replicated in emerging economies.

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Exploring the Role of Islamic Fintech in Combating the Aftershocks of COVID-19: The Pen Social Innovation of the Islamic Financial System

Journal of Open Innovation Technology Market and Complexity ◽

10.3390/joitmc7020136 ◽

2021 ◽

Vol 7 (2) ◽

pp. 136

Author(s):

Mustafa Raza Rabbani ◽

Abu Bashar ◽

Nishad Nawaz ◽

Sitara Karim ◽

Mahmood Asad Mohd. Ali ◽

...

Keyword(s):

Financial Services ◽

Open Innovation ◽

Financial Stability ◽

Social Innovation ◽

Global Financial Crisis ◽

Financial System ◽

Real Economy ◽

Business Context ◽

The World

The purpose of the current study is to investigate the role of the Islamic financial system in recovery post-COVID-19 and the way Fintech can be utilized to combat the economic reverberations created by COVID-19. The global financial crisis of 2008 has established the credentials of the Islamic financial system as a sustainable financial system which can save the long run interests of the average citizens around the world while adding value to the real economy. The basic ethical tenets available in the Islamic financial system make it more suited and readymade to fight the economic aftershocks of a pandemic like COVID-19. The basic principles of ethical Islamic finance have solid connections to financial stability and corporate social responsibility within the wide-reaching business context. With the emergence of Financial technology (Fintech) it has provided a missing impetus to the Islamic financial system to compete on equal ground with its conventional counterpart and prove its mettle. The study uses discourse analysis along with the content analysis to extract content and draw a conclusion. The findings of the study indicate that COVID-19 pandemic has provided the opportunity for the social and open innovation to grow and finance world have turned to open innovation to provide a speedy, timely, reliable, and sustainable solution to the world. The findings of the study provide significant implications for governments and policy makers in efficient application of Fintech and innovative Islamic financial services to fight the economic consequences of the COVID-19 pandemic.

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