The Conceptual Foundations of Macroprudential Policy : A Roadmap

This paper explores post-Lehman macroprudential regulation by interacting two types of market failures (principal-agent and collective action) with two cognition modes (unconstrained and constrained) in the context of aggregate risk. Four paradigms with orthogonal policy justifications are identifie...

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Bibliographic Details
Main Authors:	de la Torre, Augusto, Ize, Alain
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2013
Subjects:	ACCELERATOR ADVANCED ECONOMIES ADVERSE EFFECTS ADVERSE IMPACT ADVERSE SELECTION AGENCY COSTS ARBITRAGE ASSET PRICE ASSET PRICES BAILOUTS BANK CREDIT BANK FAILURES BANK OF ENGLAND BANK PANICS BANK REGULATION BANKING CRISES BANKING CRISIS BANKING PANICS BORROWING BOUNDED RATIONALITY BUSINESS CYCLE BUSINESS CYCLES CAPITAL REGULATION CAPITAL REQUIREMENTS CENTRAL BANKS COLLATERAL COLLECTIVE ACTION COLLECTIVE ACTION PROBLEMS COMMERCIAL BANKING COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES COMPENSATION SYSTEMS CONSUMER PROTECTION COORDINATION FAILURES CREDIT EXPANSION CREDIT POLICIES CREDITORS DEBT DEPOSIT DEPOSIT INSURANCE DEPOSITORS DEVELOPMENT BANK DEVELOPMENT POLICY DISCLOSURE REQUIREMENTS DRIVERS ECONOMETRICS ECONOMIC PERFORMANCE ECONOMIC RESEARCH ECONOMIC SURVEYS ECONOMIC THEORY ECONOMICS EXCESS LIQUIDITY EXPECTED UTILITY EXPOSURE EXTERNALITIES EXTERNALITY FAILURE RESOLUTION FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL AUTHORITIES FINANCIAL CONTAGION FINANCIAL CONTRACTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FRAGILITY FINANCIAL INNOVATION FINANCIAL INSTABILITY FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL MARKET FINANCIAL MARKET PARTICIPANTS FINANCIAL MARKETS FINANCIAL REGULATION FINANCIAL SAFETY NET FINANCIAL SECTOR FINANCIAL STABILITY FINANCIAL STRUCTURE FINANCIAL STUDIES FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL VOLATILITY GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM ANALYSIS HOLDING INDIVIDUAL MARKET INFORMATION ASYMMETRIES INFORMATION ASYMMETRY INFORMATION PROCESSING INFORMATION TECHNOLOGY INNOVATION INTEREST RATES INTERNATIONAL BANK INTERNATIONAL FINANCE INVESTMENT CHOICES INVESTMENT DECISIONS IRRATIONAL EXUBERANCE LENDER LENDER OF LAST RESORT LIQUID ASSETS LIQUIDITY LIQUIDITY PROBLEMS LIQUIDITY RISK LOAN MACROECONOMIC CONTEXT MACROECONOMIC POLICY MACROECONOMICS MARK-TO-MARKET MARK-TO-MARKET ACCOUNTING MARKET DISCIPLINE MARKET FAILURE MARKET FAILURES MARKET LIQUIDITY MARKET PARTICIPANT MARKET PARTICIPANTS MARKET PLAYERS MARKET PRICES MARKET PRICING MARKET REQUIREMENTS MATURITY MATURITY MISMATCH MONETARY POLICY MORAL HAZARD NEGATIVE EXTERNALITIES PAYMENT SYSTEM PAYMENT SYSTEMS PECUNIARY EXTERNALITIES POLICY RESPONSE POLICY RESPONSES POLITICAL ECONOMY PORTFOLIO PRIVATE CAPITAL PRUDENTIAL REGULATION PRUDENTIAL REQUIREMENTS PUBLIC DEBT PUBLIC GOOD PUBLIC INVESTMENT PUT OPTION RATING AGENCIES REGULATOR REGULATORS REGULATORY FRAMEWORK REGULATORY REQUIREMENTS RESERVE RESERVE REQUIREMENTS RETURN RETURNS RISK MANAGEMENT RISK TAKING SAFETY SAFETY NET SHAREHOLDERS SIDE EFFECTS SOCIAL BENEFITS SOCIAL COSTS SOLVENCY SYSTEMIC RISK SYSTEMIC RISKS TAX TAXATION TRADING UTILITY MAXIMIZATION UTILITY THEORY VOLATILITY WEALTH WHOLESALE FUNDING
Online Access:	http://documents.worldbank.org/curated/en/2013/08/18112903/rhyme-reason-macroprudential-policy-four-guideposts-find-your-bearings-rhyme-reason-macroprudential-policy-four-guideposts-find-your-bearings http://hdl.handle.net/10986/16009