Comparative assessment of macroprudential policies

This paper provides a comparative assessment of the e¤ectiveness of macroprudential policies in 12 Asia-Paci…c economies, using comprehensive databases of domestic macroprudential policies and capital ‡ow management (CFM) policies. We …nd that banking sector CFM polices and bond market CFM policies are effective in slowing down banking in‡ows and bond in‡ows, respectively. We also …nd some evidence of spillover e¤ects of these policies. Finally, regarding the interaction of monetary policy and macroprudential policies, our empirical …ndings suggest that macroprudential policies are more successful when they complement monetary policy by reinforcing monetary tightening, than when they act in opposite directions. JEL codes. E52, E58, F32, F34, G28. Keywords. macroprudential policy, capital ‡ow management policy, interest rate policy, complementarity, Asia-Paci…c. We are grateful for comments by seminar participants at the Bank for International Settlements, the Bank of Korea and the Monetary Authority of Singapore as well as by participants at the RBNZ–BIS conference on “Cross-border …nancial linkages in Asia and the Paci…c”and the DNB–EBC conference on “Macroprudential regulation: from theory to implementation”. We thank Claudio Borio, Woon Gyu Choi, Stijn Claessens, John Geanakoplos, San Ling Lam, Rob Nijskens, Frank Packer, Dirk Schoenmaker, Christie Smith and Philip Turner for helpful suggestions, Bilyana Bogdanova and Jimmy Shek for their excellent research assistance, and Emma Claggett for language editing. The views presented here are solely those of the authors and do not necessarily represent those of the Bank for International Settlements.