Central Bank Independence and Systemic Risk

Andrieş, Alin Marius; Podpiera, Anca Maria; Sprincean, Nicu

doi:10.2139/ssrn.3641817

Cited by 1 publication

(1 citation statement)

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“…Their findings indicate that the democratic environment plays a crucial role in moderating the relationship between central bank independence and systemic risk. [ 25 ] investigate the relationship between the independent central bank and the systemic risk measures of banks. Their findings demonstrate that central bank independence has a negative, and significant effect on banks systemic risk.…”

Section: Literature Reviewmentioning

confidence: 99%

Evaluation of central bank independence, macroprudential policy, and credit gap in developing countries

et al. 2023

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This study aims to examine whether Central Bank Independence (CBI) and Macroprudential Policy (MAPP) are capable of assisting the improvement of stability in the financial system, regarding the credit gap for 20 developing markets from 2000 to 2021. To examine this financial association, a panel threshold nonlinear model was implemented, based on the potentially time-varying influence of the CBI and MAPP index on the credit gap. The effects of this relationship also emphasized the CBI degree, whose greater level often stabilized the financial sector better. In this case, a stronger effect is commonly prioritized when CBI is below its trend. Based on the analysis, the selected experimental countries were categorized into two groups. The results showed that the nations with a higher CBI degree had greater stability in the financial system. Tighter MAPP also improved financial stability when CBI was below its trend. However, it did not enhance stability when CBI was more than the threshold level.

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Section: Literature Reviewmentioning

confidence: 99%