Jon Danielsson, Robert Macrae, Dimitri Tsomocos, Jean-Pierre Zigrand, 15 December 2016

Discretionary macroprudential policies aim to be countercyclical by adjusting risk-taking across the financial cycle. This column argues that the opposite effect may happen in certain cases. Depending on how regulators measure risk and how they react, the eventual outcome may well be procyclical, with serious unintended consequences. 

Eugenio Cerutti, Stijn Claessens, Lev Ratnovski, 08 June 2014

‘Global liquidity’ is often used to describe the impact of low US and EZ interest rates on the rest of the world. The concept is critical for understanding the global financial cycle and international spillovers. This column defines global liquidity as the ease of financing in cross-border markets and points to its potential drivers. To limit their exposures to global liquidity fluctuations nations can embrace better macro policy frameworks, consider capital flow management tools, and more stringently regulate and supervise banks.

Events