Macro Prudential Policies from a Micro Prudential Angle:

The standard macro(prudential) models focus on externalities and treat all prudential instruments as alternative, but equivalent, forms of Pigouvian taxes. This paper explicitly models individual banks' risk choices and shows that different prudential instruments affect banks' risk-taking...

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Bibliographic Details
Main Author: Cordella, Tito (Author)
Format: Electronic eBook
Language:English
Published: Washington, D.C The World Bank 2013
Online Access:Volltext
Summary:The standard macro(prudential) models focus on externalities and treat all prudential instruments as alternative, but equivalent, forms of Pigouvian taxes. This paper explicitly models individual banks' risk choices and shows that different prudential instruments affect banks' risk-taking incentives differently. Thus, conflicts may arise between the micro and macro prudential stance
Physical Description:1 Online-Ressource (9 p)
DOI:10.1596/1813-9450-6721