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Macroprudential Policy and Credit Supply

Swiss Journal of Economics and Statistics volume 152, pages 305–318 (2016)Cite this article

Summary

In this paper we analyze financial crises and the interactions of macroprudential policy and credit. Financial crises are recurrent systemic phenomena, often triggering deep and long-lasting recessions with large reductions in aggregate welfare, output and employment Importantly for policy, systemic financial crises are typically not random events triggered by exogenous events, but they tend to occur after periods of rapid, strong credit growth. Moreover, a credit crunch tends to follow in a financial crisis with negative aggregate real effects Macroprudential policy softens the credit supply cycles, with important positive effects on the aggregate real economy in crisis times.

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Authors and Affiliations

  1. CREI, Barcelona GSE, CEPR, ICREA-Universitat Pompeu Fabra, Spain

    José-Luis Peydró

Authors
  1. José-Luis Peydró
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Correspondence to José-Luis Peydró.

Additional information

I thank the Editor for helpful comments and acknowledge financial support from project ECO2012-32434 of the Spanish Ministry of Economics and Competitiveness and the European Research Council Grant (project 648398).

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Peydró, JL. Macroprudential Policy and Credit Supply. Swiss J Economics Statistics 152, 305–318 (2016). https://doi.org/10.1007/BF03399430

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  • DOI: https://doi.org/10.1007/BF03399430

JEL-Classification

  • E58
  • G01
  • G21
  • G28

Keyword

  • Financial crises
  • macroprudential policy
  • credit supply
  • risk-taking
  • capital
  • liquidity