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This Technical Note on Macroprudential Institutional Arrangements and Policies on Switzerland highlights that macroprudential prudential powers and responsibilities are split across agencies. There is one dedicated macroprudential tool, the Counter Cyclical Buffer, which has a specified framework for decision making and consultation. Developments in real estate and mortgage lending are important systemic concerns. Very loose monetary policy has driven interest rates down to historically low levels, accelerating mortgage lending and bringing total mortgage debt to more than 140 percent of gross domestic product. The authorities have taken measures to address these risks. It is recommended that transparency and accountability could be strengthened by highlighting cross agency activity and policy analysis related to financial stability and macroprudential policies to the public. In a medium-term perspective macroprudential arrangements should be reviewed while considering placing responsibility and powers for macroprudential policies with one institution or committee. Additional measures may be needed. Mortgages to businesses and for commercial purposes deserve further attention and measures.

Banks and banking --- State supervision --- Banks and Banking --- Finance: General --- Macroeconomics --- Real Estate --- Industries: Financial Services --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Real Estate Markets, Spatial Production Analysis, and Firm Location: General --- General Financial Markets: Government Policy and Regulation --- Financial Markets and the Macroeconomy --- Housing Supply and Markets --- Finance --- Property & real estate --- Banking --- Real estate prices --- Financial sector stability --- Macroprudential policy --- Financial institutions --- Prices --- Financial sector policy and analysis --- Housing prices --- Housing --- Financial services industry --- Economic policy --- Switzerland

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This paper presents the theoretical structure of MAPMOD, a new IMF model designed to study vulnerabilities associated with excessive credit expansions, and to support macroprudential policy analysis. In MAPMOD, bank loans create purchasing power that facilitates adjustments in the real economy. But excessively large and risky loans can impair balance sheets and sow the seeds of a financial crisis. Banks respond to losses through higher spreads and rapid credit cutbacks, with adverse effects for the real economy. These features allow the model to capture the basic facts of financial cycles. A companion paper studies the simulation properties of MAPMOD.

Financial crises. --- Business cycles. --- Economic cycles --- Economic fluctuations --- Cycles --- Crashes, Financial --- Crises, Financial --- Financial crashes --- Financial panics --- Panics (Finance) --- Stock exchange crashes --- Stock market panics --- Crises --- Accounting --- Banks and Banking --- Macroeconomics --- Money and Monetary Policy --- Industries: Financial Services --- Business Fluctuations --- Financial Markets and the Macroeconomy --- Money and Interest Rates: Forecasting and Simulation --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Public Administration --- Public Sector Accounting and Audits --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Banking --- Financial reporting, financial statements --- Monetary economics --- Finance --- Financial statements --- Bank credit --- Macroprudential policy --- Loans --- Banks and banking --- Finance, Public --- Credit --- Economic policy

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In recent years, macroprudential policy has become an increasingly active policy area. Many countries have adopted it as a tool to safeguard financial stability, in particular to deal with the credit and asset price cycles driven by global capital flows. This paper reviews the use of key macroprudential instruments and capital flow measures in 13 Asian economies and 33 economies in other regions since 2000, and constructs various macroprudential policy indices, aggregating sub-indices on key instruments. Asian economies appear to have made greater use of macroprudential tools, especially housing-related measures, than their counterparts in other regions. The effects of macroprudential policy are then assessed through an event study, cross-country macro panel regressions and bank-level micro panel regressions. The analysis suggests that macroprudential policy and capital flow measures have helped curb housing price growth, equity flows, credit growth, and bank leverage. The instruments that have been particularly effective in this regard include loan-to-value ratio caps, housing tax measures, and foreign currency-related measures.

Fiscal policy --- Tax policy --- Taxation --- Economic policy --- Finance, Public --- Government policy --- Asia --- Economic policy. --- Exports and Imports --- Macroeconomics --- Money and Monetary Policy --- Real Estate --- Financial Institutions and Services: Government Policy and Regulation --- Central Banks and Their Policies --- International Investment --- Long-term Capital Movements --- Financial Markets and the Macroeconomy --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Housing Supply and Markets --- International economics --- Monetary economics --- Property & real estate --- Capital flow management --- Macroprudential policy --- Credit --- Housing prices --- Capital flows --- Balance of payments --- Financial sector policy and analysis --- Money --- Prices --- Capital movements --- Housing --- Hong Kong Special Administrative Region, People's Republic of China

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This paper develops an open-economy DSGE model with an optimizing banking sector to assess the role of capital flows, macro-financial linkages, and macroprudential policies in emerging Asia. The key result is that macro-prudential measures can usefully complement monetary policy. Countercyclical macroprudential polices can help reduce macroeconomic volatility and enhance welfare. The results also demonstrate the importance of capital flows and financial stability for business cycle fluctuations as well as the role of supply side financial accelerator effects in the amplification and propagation of shocks.

Econometric models. --- Banks and banking --- Agricultural banks --- Banking --- Banking industry --- Commercial banks --- Depository institutions --- Finance --- Financial institutions --- Money --- Econometrics --- Mathematical models --- Banks and Banking --- Exports and Imports --- Macroeconomics --- Money and Monetary Policy --- Monetary Policy --- Policy Objectives --- Policy Designs and Consistency --- Policy Coordination --- International Policy Coordination and Transmission --- Financial Markets and the Macroeconomy --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Financial Institutions and Services: Government Policy and Regulation --- International Investment --- Long-term Capital Movements --- Monetary economics --- Financial services law & regulation --- International economics --- Macroprudential policy --- Credit --- Capital adequacy requirements --- Capital flows --- Financial sector policy and analysis --- Financial regulation and supervision --- Balance of payments --- Capital inflows --- Economic policy --- Asset requirements --- Capital movements --- China, People's Republic of

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As undiversified commodity exporters, GCC economies are prone to pro-cyclical systemic risk in the financial system. During periods of high hydrocarbon prices, favorable economic prospects make the financial sector keen to lend, leading to higher domestic credit growth and easier access to external financing. Fiscal policy is a very important tool for macroeconomic management, but due to the significant time lags and expenditure rigidities, it has not been a flexible enough tool to prevent credit booms and the build-up of systemic risk in the GCC. This, together with limited monetary policy independence because of the pegged exchange rate, means that macro-prudential policy has a particularly important role in limiting systemic risk in the financial system. This importance is reinforced by the underdeveloped financial markets in the region that provide limited risk management tools and shortcomings in crisis resolution frameworks. This paper will discuss the importance of macro-prudential policy in the GCC countries, look at the experience with macro-prudential policies in the boom/bust cycle in the second half of the 2000s, and use the broad frameworks being developed in the Fund and elsewhere to discuss ways existing frameworks and policy toolkits in the region can be strengthened given the characteristics of the GCC economies.

Finance --- Financial risk --- Risk management --- Fiscal policy --- Tax policy --- Taxation --- Economic policy --- Finance, Public --- Insurance --- Management --- Business risk (Finance) --- Money risk (Finance) --- Risk --- Funding --- Funds --- Economics --- Currency question --- Government policy --- Gulf Cooperation Council. --- Gulf Co-operation Council --- Co-operation Council for the Arab States of the Gulf --- States of Gulf Co-operation Council --- Golf-Rat --- GCC --- G.C.C. --- Majlis al-Taʻāwun al-Khalījī --- Majlis al-Taʻāwun al-Khalījī al-ʻArabī --- GKR --- Kooperationsrat Arabischer Staaten am Golf --- Cooperation Council for the Arab States of the Gulf --- Duwal Majlis al-Khalīj --- Gŏlpʻŭ Hyŏmnyŏk Wiwŏnhoe --- Kŏlpʻŭ Hyŏmnyŏk Wiwŏnhoe --- Majlis al-Taʻāwun li-Duwal al-Khalīj al-ʻArabīyah --- Golfkooperationsrat --- AGCC --- A.G.C.C. --- Duwal Majlis al-Taʻāwun al-Khalījī --- Sovet sotrudnichestva arabskikh gosudarstv Persidskogo zaliva --- SSAGPZ --- Arab Gulf Cooperation Council --- مجلس التعاون الخليجي --- مجلس التعاون لدول الخليج العربية --- Shūrā-yi Hamkārī-i Khalīj-i Fārs --- شوراى همکارى خليج فارس --- Persian Gulf Cooperation Council --- PGCC --- Conseil de coopération du Golfe --- Gulf Cooperative Council --- Consiglio di cooperazione del Golfo --- Ccg --- E-books --- Arab Countries --- Financial Risk Management --- Fiscal Policy --- Business & Economics --- Political Science --- Banks and Banking --- Finance: General --- Macroeconomics --- Money and Monetary Policy --- Financial Institutions and Services: Government Policy and Regulation --- Central Banks and Their Policies --- General Financial Markets: Government Policy and Regulation --- Financial Markets and the Macroeconomy --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Banking --- Monetary economics --- Macroprudential policy --- Financial sector stability --- Systemic risk --- Credit --- Financial sector policy and analysis --- Money --- Macroprudential policy instruments --- Banks and banking --- Financial services industry --- Financial risk management --- United Arab Emirates