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Europe Beyond the EuroThe Macroprudential Approach: A Strategy for All Seasons?

Europe Beyond the Euro: The Macroprudential Approach: A Strategy for All Seasons? [This chapter looks at the history of macroprudential indicators and policies, from their inception in the late twentieth century to today. They were born in crisis, and have been taken seriously since the Global Financial Crisis, as it becomes increasingly recognized that markets alone are not necessarily self-stabilizing. The macroprudential infrastructure benefits and suffers from having a much shorter history, and less visibility, than monetary and fiscal policies. To date macroprudential instruments have been employed very largely on only the first of the three conjunctures for which their use has been contemplated: “taking away the punchbowl” in a time of financial exuberance, avoiding fire sales and implosions in downturns, and mitigating the effects of structural concentration. In a time of risks the two latter policy challenges may be very relevant. The chapter suggests a number of ways in which the effectiveness of macroprudential policies can be enhanced. It explains also that, even more than other policies, the success of macroprudential policies depends on international cooperation.] http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png

Europe Beyond the EuroThe Macroprudential Approach: A Strategy for All Seasons?

Part of the St Antony's Series Book Series
Europe Beyond the Euro — Sep 25, 2021

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References (58)

Publisher
Springer International Publishing
Copyright
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2021
ISBN
978-3-030-77114-0
Pages
141 –174
DOI
10.1007/978-3-030-77115-7_8
Publisher site
See Chapter on Publisher Site

Abstract

[This chapter looks at the history of macroprudential indicators and policies, from their inception in the late twentieth century to today. They were born in crisis, and have been taken seriously since the Global Financial Crisis, as it becomes increasingly recognized that markets alone are not necessarily self-stabilizing. The macroprudential infrastructure benefits and suffers from having a much shorter history, and less visibility, than monetary and fiscal policies. To date macroprudential instruments have been employed very largely on only the first of the three conjunctures for which their use has been contemplated: “taking away the punchbowl” in a time of financial exuberance, avoiding fire sales and implosions in downturns, and mitigating the effects of structural concentration. In a time of risks the two latter policy challenges may be very relevant. The chapter suggests a number of ways in which the effectiveness of macroprudential policies can be enhanced. It explains also that, even more than other policies, the success of macroprudential policies depends on international cooperation.]

Published: Sep 25, 2021

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