The interaction between macroprudential and monetary policies: The cases of Norway and Sweden

Cao, Jin; Dinger, Valeriya; Grodecka‐Messi, Anna; Juelsrud, Ragnar; Zhang, Xin

doi:10.1111/roie.12507

Cited by 16 publications

(7 citation statements)

References 46 publications

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“…In Norway and Sweden (Cao et al, 2020), the evidence is somewhat lighter, perhaps related to the initial, counter-intuitive finding that a monetary tightening in core countries is associated with an increase in bank lending. In these circumstances, there is evidence that aggregate macroprudential policy depresses aggregate lending compared to the counterfactual, although it is difficult to find significant effects for different types of macroprudential policy or different sub-categories of lending, perhaps suggesting some substitution effects.…”

Section: Discussionmentioning

confidence: 93%

“…Although the overall results are mixed, they find evidence that the strength of international monetary policy spillovers to inward international bank lending varies depending on the stance of the domestic macroprudential policy. Cao et al (2020) conduct a similar exercise, this time focusing on two advanced economies, Norway and Sweden. They find that, in both countries, domestic macroprudential policy helps mitigate the effects of foreign monetary surprises.…”

Section: Resultsmentioning

confidence: 99%

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The Interaction Between Macroprudential Policy and Monetary Policy: Overview

et al. 2020

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This paper presents the main findings of an International Banking Research Network initiative examining the interaction between monetary policy and macroprudential policy in determining international bank lending. We give an overview on the data, empirical specifications and results of the seven papers from the initiative. The papers are from a range of core and smaller advanced economies, and emerging markets. The main findings are as follows. First, there is evidence that macroprudential policy in recipient countries can partly offset the spillover effects of monetary policy conducted in core countries. Meanwhile, domestic macroprudential policy in core countries can also affect the cross-border transmission of domestic monetary policy via lending abroad, by limiting the increase in lending by less strongly capitalised banks. Second, the findings highlight that studying heterogeneities across banks provides complementary insights to studies using more aggregate data and focusing on average effects. In particular, we find that individual bank characteristics such as bank size or G-SIB status play a first-order role in the transmission of these policies. Finally, the impacts differ considerably across prudential policy instruments, which also suggests the importance of more granular analysis.

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Section: Discussionmentioning

confidence: 93%

Section: Resultsmentioning

confidence: 99%

The Interaction Between Macroprudential Policy and Monetary Policy: Overview

et al. 2020

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View full text Add to dashboard Cite

show abstract

“…Cao et al (2020) conduct a similar exercise, this time focusing on two advanced economies, Norway and Sweden. They find that, in both countries, domestic macroprudential policy helps mitigate the effects of foreign monetary surprises.…”

Section: Resultsmentioning

confidence: 99%

“…In Norway and Sweden (Cao et al., 2020), the evidence is somewhat lighter, perhaps related to the initial, counter‐intuitive finding that a monetary tightening in core countries is associated with an increase in bank lending. In these circumstances, there is evidence that aggregate macroprudential policy depresses aggregate lending compared to the counterfactual, although it is difficult to find significant effects for different types of macroprudential policy or different sub‐categories of lending, perhaps suggesting some substitution effects.…”

Section: Discussionmentioning

confidence: 99%

The interaction between macroprudential policy and monetary policy: Overview

Bussière

Cao²,

Haan

et al. 2020

Rev International Economics

Self Cite

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This paper presents the main findings of an International Banking Research Network initiative examining the interaction between monetary policy and macroprudential policy in determining international bank lending. We give an overview on the data, empirical specifications and results of the seven papers from the initiative. The papers are from a range of core and smaller advanced economies, and emerging markets . The main findings are as follows. First, there is evidence that macroprudential policy in recipient countries can partly offset the spillover effects of monetary policy conducted in core countries. Meanwhile, domestic macroprudential policy in core countries can also affect the cross‐border transmission of domestic monetary policy via lending abroad, by limiting the increase in lending by less strongly capitalized banks. Second, the findings highlight that studying heterogeneities across banks provides complementary insights to studies using more aggregate data and focusing on average effects. In particular, we find that individual bank characteristics such as bank size or GSIB status play a first‐order role in the transmission of these policies. Finally, the impacts differ considerably across prudential policy instruments, which also suggests the importance of more granular analysis.

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“…Macroprudential policy aims to the broad spectrum of entities and monetary policy is focused to the credit institutions (Kim & Mehrotra, 2019). Cao et al (2021) analysed the interaction of monetary and macroprudential policy for reducing the impact of foreign monetary shocks. The results confirmed that macroprudential policy helped to mitigate the effects of foreign monetary shocks.…”

Section: Macroprudential Policy For Recovery Tourism Economiesmentioning

confidence: 99%

The Macroprudential Measures for Mitigating the Effects of the Pandemic Crisis in Tourism Economies

Biškupec

Herman

Ružić

2022

Business, Management and Economics Engineering

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Purpose – The paper evaluates the applied macroprudential measures in selected countries by testing their efficiency in tourism and reducing the revenue gap in tourism sector during the pandemic crisis. Research methodology – The effects of macroprudential policy were tested using the Granger causality test and PVAR model. The research used data from the period 2019 to 2022 by quarters. The impulse response function evaluated the long run impact of macroprudential policy on performance of tourism entities. Findings – The results confirm the positive effect of systemically important institutions buffer (SIB) on reducing the losses in tourism. The impulse response showed the significant impact of SIB on revenue gap (RG) reduction. Research limitations – The research has limitations regarding to the short period of observation. The additional variables can be entered into the model. Practical implications – The results serve the policy makers for shaping the measures for recovery policies and maintaining long-term economic stability. The findings are useful as they can serve as a guide in designing measures to help the tourism recovery. Originality/Value – The contribution of this study is reflected in providing scientific evidence of macroprudential measures effectiveness for several countries and routing policies for tourism recovery.

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The interaction between macroprudential and monetary policies: The cases of Norway and Sweden

Cited by 16 publications

References 46 publications

The Interaction Between Macroprudential Policy and Monetary Policy: Overview

The Interaction Between Macroprudential Policy and Monetary Policy: Overview

The interaction between macroprudential policy and monetary policy: Overview

The Macroprudential Measures for Mitigating the Effects of the Pandemic Crisis in Tourism Economies

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