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Do Macroprudential Policies Affect Non-bank Financial Intermediation?

Author

Listed:
  • Stijn Claessens

    (Bank for International Settlements)

  • Giulio Cornelli

    (Bank for International Settlements, University of Zurich)

  • Leonardo Gambacorta

    (Bank for International Settlements)

  • Francesco Manaresi

    (Organisation for Economic Co-operation and Development)

  • Yasushi Shiinad

    (Japanese Financial Services Agency)

Abstract

We analyze how macroprudential policies (MaPs), largely applied to banks and to a lesser extent to borrowers, affect non-bank financial intermediation (NBFI). Using data for 24 of the jurisdictions participating in the Financial Stability Board’s monitoring exercise over the period 2002–17, we study the effects of MaP actions on bank assets and on those NBFI activities that may involve bank-like financial stability risks (the narrow measure of NBFI). We find that a net tightening of domestic MaPs increases these NBFI activities and decreases bank assets, raising the NBFI share in total financial assets. By contrast, a net tightening of MaPs in foreign jurisdictions leads to a reduction of the NBFI share—as a result of a drop in NBFI activities or an increase in domestic banking assets. Tightening and easing MaPs have largely symmetric effects on NBFI. We find that the effect of MaPs (both domestic and foreign) is economically and statistically significant for all those NBFI economic functions that may pose risks to financial stability.

Suggested Citation

  • Stijn Claessens & Giulio Cornelli & Leonardo Gambacorta & Francesco Manaresi & Yasushi Shiinad, 2023. "Do Macroprudential Policies Affect Non-bank Financial Intermediation?," International Journal of Central Banking, International Journal of Central Banking, vol. 19(5), pages 185-236, December.
    • Handle: RePEc:ijc:ijcjou:y:2023:q:5:a:5
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    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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