Macroprudential Policies for a Resource Rich Economy The Case of Mongolia
Electronic Access:
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Summary:
This paper explores the extent to which macroprudential tools can be used to manage banking sector risks in Mongolia, a commodity producing country exposed to both procyclical and cross-sectional financial sector risks. Loose fiscal policy, rising credit activity, and heightened risk appetite—attributable to the commodity boom—are fuelling price volatility in asset markets, posing significant risks to financial stability if left unchecked. Rising interconnectedness, potential increase in dollarization and concentrated exposures are compounding those risks. Macroprudential tools can complement fiscal and monetary policy adjustments to avoid the buildup of vulnerabilities in the banking sector.
Series:
Working Paper No. 2013/018
Subject:
Banking Commercial banks Credit Financial institutions Financial sector policy and analysis Financial sector stability Macroprudential policy Money Systemic risk
English
Publication Date:
January 22, 2013
ISBN/ISSN:
9781475594881/1018-5941
Stock No:
WPIEA2013018
Pages:
47
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