Macroprudential policy and the inward transmission of monetary policy: The case of Chile, Mexico, and Russia

Bush, Georgia; Gómez, Tomás Tornero; Jara, Alejandro; Moreno, David; Styrin, Konstantin; Ushakova, Yulia

doi:10.1111/roie.12503

Cited by 9 publications

(6 citation statements)

References 36 publications

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“…Three other papers take the perspective of recipient countries, both emerging markets and smaller European countries. Bush et al (2020) focus on three EMEs, Chile, Mexico, and Russia, to measure whether macroprudential policy in these countries interacts with monetary shocks in core countries. As these three economies can be considered small open economies, the authors can reasonably assume monetary policy in core countries to be exogenous.…”

Section: Resultsmentioning

confidence: 99%

“…In emerging markets, the evidence across Chile, Mexico and Russia is mixed (Bush et al, 2020). A tighter stance of domestic prudential policies does appear to attenuate the inward transmission of foreign monetary policy but the offsetting power of those policies differs across countries, specific channels of transmission, and specific policies.…”

Section: Discussionmentioning

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: Resultsmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%

The Interaction Between Macroprudential Policy and Monetary Policy: Overview

et al. 2020

Self Cite

View full text Add to dashboard Cite

show abstract

“…Bush et al. (2020) focus on three EMEs, Chile, Mexico, and Russia, to measure whether macroprudential policy in these countries interacts with monetary shocks in core countries. As these three economies can be considered small open economies, the authors can reasonably assume monetary policy in core countries to be exogenous.…”

Section: Resultsmentioning

confidence: 99%

“…In emerging markets, the evidence across Chile, Mexico and Russia is mixed (Bush et al., 2020). A tighter stance of domestic prudential policies does appear to attenuate the inward transmission of foreign monetary policy but the offsetting power of those policies differs across countries, specific channels of transmission, and specific policies.…”

Section: Discussionmentioning

confidence: 99%

The interaction between macroprudential policy and monetary policy: Overview

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Haan

et al. 2020

Rev International Economics

Self Cite

View full text Add to dashboard Cite

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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“…According to their analysis, increases in banks' reserve requirements led to a decline in the level of economic activity. Bush et. al.…”

Section: Assessing Maps Effectiveness: Selective Reviewmentioning

confidence: 99%