Macroprudential regulation in the post-crisis era: Has the pendulum swung too far?

Abstract

This paper presents an institutional model to investigate the cooperation between a government and a central bank. The former selects the monetary policy and then delegates the organization of macroprudential policy to the latter. Their policy stances are the result of sequential constrained utility maximization. Using indirect inference, we find a set of coefficients that can capture the UK policy stances for 1993-2016. This suggests post-crisis regulation has been overly intrusive. Finally, we show that this regulatory dilemma can be avoided by committing to a highly stabilizing monetary regime that uses QE extensively.

Assessing interconnectedness and systemic importance of Chinese financial institutions

“… 11 As research has advanced, the exploration of systemic financial risk has encompassed various dimensions, such as effective measures, 12 , 13 , 14 contagion spillovers, 15 , 16 , 17 , 18 , 19 , 20 , 21 driving factors, 22 , 23 , 24 , 25 , 26 and policy regulation. 27 , 28 …”