Reserve Requirements in the Brave New Macroprudential World

• Tác giả: Tito Cordella
• Ngôn ngữ: eng
• Ký hiệu phân loại: 339.5 Macroeconomic policy
• Thông tin xuất bản: World Bank, Washington, DC, 2014
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 297073
• Chủ đề: 1. ADVERSE EFFECT; 2. AGENCY PROBLEMS; 3. ARBITRAGE; 4. ASYMMETRIC INFORMATION; 5. BAILOUT

Tóm tắt

Using a new, large data set on quarterly reserve requirements for the period 1970-2011, this paper provides new evidence on the use of reserve requirements as a countercyclical macroprudential tool in developing countries. The appeal of reserve requirements lies in the pro-cyclical behavior of the exchange rate over the business cycle in developing countries. This enormously complicates the use of interest rates as a countercyclical instrument (because of its effect on the exchange rate) and calls for a second instrument. The paper suggests that conflicts may arise between the microprudential and macroprudential policy stances.