Macroprudential policies, economic growth and banking crises

Using a sample covering emerging market and advanced economies, we assess the impact of macroprudential policies on financial stability. Our empirical setup is designed to account for potential direct indirect effects that can have banking crises. We find while (MPPs) exert stabilizing effect, they also an destabilizing which works through depressing economic growth. It turns out mitigating MPPs likelihood crises more pronounced in economies relative economies.