Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/300139 
Authors: 
Year of Publication: 
2024
Series/Report no.: 
IES Working Paper No. 7/2024
Publisher: 
Charles University in Prague, Institute of Economic Studies (IES), Prague
Abstract: 
Macroprudential policy has gained prominence for promoting financial stability. In this paper, we assess the effectiveness of macroprudential policy in reducing credit growth over a 22-year period across 129 countries. Additionally, we investigate the interaction between macroprudential policy, dollarisation, and various exchange rate regimes, examining their impact on different financial stability indicators. Our findings indicate that macroprudential policy significantly reduces credit growth within a quarter of implementation, though this is not evident in the case of soft peg exchange rate regimes. Furthermore, our analysis reveals that dollarised countries exhibit superior outcomes in financial stability when compared to alternative exchange rate regimes.
Subjects: 
macroprudential policy
dollarisation
exchange rate
credit growth
non-performing loans
inflation
interest rates
empirical evaluation
JEL: 
E42
E52
E58
Document Type: 
Working Paper

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