- Open Access
Macroprudential Policy and Credit Supply
Swiss Journal of Economics and Statistics volume 152, pages305–318(2016)
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.
Allen, F., and D. Gale (2007), Understanding Financial Crises, New York.
Allen, F., and K. Rogoff (2011), “Asset Prices, Financial Stability and Monetary Policy”, in The Riksbank’s Inquiry into the Risks in the Swedish Housing Market, P. Jansson and M. Persson, eds., Stockholm, pp. 189–218.
Bernanke, B. (1983), “Nonmonetary Effects of the Financial Crisis in Propagation of the Great Depression”, American Economic Review, 73(3), pp. 257–276.
Bernanke, B., and M. Gertler (1995), “Inside the Black Box: The Credit Channel of Monetary Policy Transmission”, Journal of Economic Perspectives, 9(4), pp. 27–48.
Bernanke, B., and A. Blinder (1992), “The Federal Funds Rate and the Channels of Monetary Transmission”, American Economic Review, 82, pp. 901–921.
Bernanke, B., and C. Lown (1991), “Credit Crunch”, Brookings Papers on Economic Activity, 22, pp. 205–248.
European Central Bank (2009), “Recent Developments in the Balance Sheets of the Eurosystem, the Federal Reserve System and the Bank of Japan”, ECB Monthly Bulletin, October, pp. 81–94.
Freixas, X., L. Laeven, and J. -L. Peydró (2015), Systemic Risk, Crises and Macroprudential Policy, Cambridge.
Gourinchas, P.-O., and M. Obstfeld (2012), “Stories of the Twentieth Century for the Twenty-First”, American Economic Journal: Macroeconomics, 4(1), pp. 226–265.
Jiménez, G., S. Ongena, J.-L. Peydró, and J. Saurina (2014), “Hazardous Times for Monetary Policy: What do Twenty-Three Million Bank Loans Say about the Effects of Monetary Policy on Credit Risk-Taking?”, Econometrica, 82(2), pp. 463–505.
Jiménez, G., S. Ongena, J.-L. Peydró, and J. Saurina (2012), “Credit Supply and Monetary Policy: Identifying the Bank Balance-Sheet Channel with Loan Applications”, American Economic Review, 102, pp. 2301–2326.
Jiménez, G., S. Ongena, J.-L. Peydró, and J. Saurina (2015), “Macroprudential Policy, Countercyclical Bank Capital Buffers and Credit Supply: Evidence from the Spanish Dynamic Provisioning Experiments”, Journal of Political Economy, forthcoming.
Reinhart, C., and K. Rogoff (2009), This Time is Different: Eight Centuries of Financial Folly, Princeton University Press.
Schularick, M., and A. M. Taylor (2012), “Credit Booms Gone Bust: Monetary Policy, Leverage Cycles, and Financial Crises, 1870–2008”, American Economic Review, 102, pp. 1029–1061.
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).
About this article
Cite this article
Peydró, J. Macroprudential Policy and Credit Supply. Swiss J Economics Statistics 152, 305–318 (2016). https://doi.org/10.1007/BF03399430
- Financial crises
- macroprudential policy
- credit supply