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Why macropru can end up being procyclical

Danielsson, Jon, Macrae, Robert, Tsomocos, Dimitrios P. and Zigrand, Jean-Pierre ORCID: 0000-0002-7784-4231 (2016) Why macropru can end up being procyclical. VoxEU.

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Discretionary macroprudential policies aim to be countercyclical by adjusting risk-taking across the financial cycle. This column argues that the opposite effect may happen in certain cases. Depending on how regulators measure risk and how they react, the eventual outcome may well be procyclical, with serious unintended consequences.

Item Type: Article
Official URL:
Additional Information: © 2016
Divisions: Finance
Systemic Risk Centre
Financial Markets Group
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
JEL classification: E - Macroeconomics and Monetary Economics > E0 - General
Date Deposited: 24 Mar 2017 15:16
Last Modified: 14 Nov 2021 00:13

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