Poorly designed macro-pru leads to ‘leakages’, says Turkish working paper
Macro-pru should be designed so firms cannot “bypass” the rules
Poorly designed macro-prudential policies could lead to “leakages” in the financial system, according to a working paper published by the Central Bank of the Republic of Turkey.
In their paper, authors F Pınar Erdem, Etkin Özen and İbrahim Ünalmış test whether macro-prudential policies are effective in controlling credit growth in emerging markets in the wake of a positive global liquidity shock.
Data collected from 30 countries implies macro-prudential policy is effective, especially during
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