Externalities and Macroprudential Policy

By Gianni De Nicolo, Giovanni Favara, Lev Ratnovski

June 7, 2012

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Gianni De Nicolo, Giovanni Favara, and Lev Ratnovski. Externalities and Macroprudential Policy, (USA: International Monetary Fund, 2012) accessed December 22, 2024

Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary

This note overviews macroprudential policy options that have been proposed to address the systemic risks experienced during the recent financial crisis. It contributes to the policy debate by providing a taxonomy of macroprudential policies in terms of the specific negative externalities in the financial system that these policies are meant to address, and discusses their interrelations and some key implementation issues.

Subject: Asset and liability management, Asset liquidity, Banking, Financial contagion, Financial crises, Financial sector policy and analysis, Macroprudential policy, Systemic risk

Keywords: Asset liquidity, Bank, Bank assets, Bank risk strategy, Capital requirement, Externalities, Externality, Financial contagion, Macroprudential policy, Market failure, Proxy externality, Prudential regulation, Regulation, SDN, Systemic risk

Publication Details

Pages:

24
Volume:

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DOI:

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Issue:

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Series:

Staff Discussion Notes No. 2012/005
Stock No:

SDNEA2012005
ISBN:

9781475504095
ISSN:

2617-6750

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