Policy Instruments to Lean Against the Wind in Latin America
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Summary:
This paper reviews policy tools that have been used and/or are available for policy makers in the region to lean against the wind and review relevant country experiences using them. The instruments examined include: (i) capital requirements, dynamic provisioning, and leverage ratios; (ii) liquidity requirements; (iii) debt-to-income ratios; (iv) loan-to-value ratios; (v) reserve requirements on bank liabilities (deposits and nondeposits); (vi) instruments to manage and limit systemic foreign exchange risk; and, finally, (vii) reserve requirements or taxes on capital inflows. Although the instruments analyzed are mainly microprudential in nature, appropriately calibrated over the financial cycle they may serve for macroprudential purposes.
Series:
Working Paper No. 2011/159
Subject:
Balance of payments Banking Capital inflows Financial institutions Foreign exchange Loans Monetary policy Mortgages Reserve requirements
English
Publication Date:
July 1, 2011
ISBN/ISSN:
9781455297726/1018-5941
Stock No:
WPIEA2011159
Pages:
113
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