The effects of macroprudential policies on credit growth

Andrieş, Alin Marius; Melnic, Florentina; Sprincean, Nicu

doi:10.1080/1351847x.2021.1939087

Cited by 7 publications

(2 citation statements)

References 95 publications

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“…By maintaining higher levels of capital buffers, that is, more shareholder capital at risk, the banks will then also be more prudent and reduce their appetite for riskier investments (Thamae & Odhiambo, 2022). Furthermore, these increased buffers translate in a higher capacity to absorb unexpected losses and avoid default scenarios (Altunbas et al, 2018; Ampudia et al, 2021; Andrieş et al, 2021; Igan et al, 2022).…”

Section: Resultsmentioning

confidence: 99%

“…The use of macroprudential tools has increased globally, prompting a rapidly growing body of literature to analyze the impact of these policies on credit growth (Bonfim & Costa, 2017; Fendoğlu, 2017; Ghosh, 2015; Schryder & Opitz, 2021), the housing market (Andrieş et al, 2021; Carreras et al, 2018; Igan & Kang, 2011; Poghsoyan, 2020; Vandenbussche et al, 2015; Zhang & Zoli, 2016), the banking sector risks (Altunbas et al, 2018; Blundell‐Wignall & Roulet, 2013; Gaganis et al, 2020; Ghosh, 2014; Laeven & Levine, 2009; Lim et al, 2011; Matos et al, 2022; Meuleman & Vennet, 2020; Niţoi et al, 2019), among others factors. However, as the incidence of recessions in the post‐GFC era have been limited, broader adoption of these tools makes it a challenge to evaluate actual effectiveness.…”

Section: Introductionmentioning

confidence: 99%

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The contribution of macroprudential policies to banks' resilience: Lessons from the systemic crises and the COVID‐19 pandemic shock

2023

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This study examines the effectiveness of macroprudential policies in reducing the banks' risk during the COVID‐19 pandemic and compares these results with the systemic banking crises years. Based on a sample of 624 banks across 40 countries during the period 2006–2020, we find that loosening capital‐aimed macroprudential policies effectively reduced banks' risk during the COVID‐19 pandemic, while this behavior led to increased risk during the systemic crises years. In contrast, tightening the remaining macroprudential policies during the systemic crises years and during the pandemic proved effective in reducing banks' risk. Furthermore, we show that the magnitude of the impact of macroprudential policies was stronger during the systemic crisis than that during the pandemic. Finally, we show that the results are driven by the capital requirement prudential policy, both during the systemic crisis and the COVID‐19 pandemic, although the conservation buffer and the leverage limit also contributes to the ineffectiveness of these policies during the COVID‐19 pandemic. The banks' leverage and loan growth also play an enhancing role of the effects of the macroprudential policies.

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Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The contribution of macroprudential policies to banks' resilience: Lessons from the systemic crises and the COVID‐19 pandemic shock

2023

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The role of market discipline and macroprudential policies in achieving bank stability

Matos,

Teixeira,

Dutra

2024

Int. J Fin Econ

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This study examines whether forcing banks to hold subordinated debt and enforcing market discipline could enhance the effectiveness of capital macroprudential policies in reducing banks' risk and contribute to bank stability. Using the system generalised method of moments and based on a sample of 322 banks across 18 countries during the period 2006–2020, we find that a higher level of subordinated debt leads banks to avoid moral‐hazard behaviours and engage in risk shifting when adapting to a tighter macroprudential framework, which in turn leads to a greater effectiveness of these policies. Furthermore, as robustness tests, we show that this effect is stronger in advanced economies and in the United States of America. These results also stand using a different proxy for banks' risk.

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What is the impact of macroprudential regulations on the Swedish housing market?

Wilhelmsson

2022

Journal of Housing Economics

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The effects of macroprudential policies on credit growth

Cited by 7 publications

References 95 publications

The contribution of macroprudential policies to banks' resilience: Lessons from the systemic crises and the COVID‐19 pandemic shock

The contribution of macroprudential policies to banks' resilience: Lessons from the systemic crises and the COVID‐19 pandemic shock

The role of market discipline and macroprudential policies in achieving bank stability

What is the impact of macroprudential regulations on the Swedish housing market?

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