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Monetary Policy and Financial System Resilience

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  • Bruni, Franco
  • Lopez, Claude

Abstract

In a time of global crisis, international policy coordination is quite natural. Yet, in normal times such coordination becomes a challenge. This is an issue especially when it comes to monetary and macroprudential policy of globally influential countries. This is especially relevant now with the trend of monetary normalisation in many of these countries. In this brief, we propose four necessary steps to help addressing these challenges: (i) Monetary policy should take into account its spillovers on financial stability, (ii) Systemic central banks need to account for the global impact of their policy, (iii) Multilateral consultations may provide a useful platform to assess these impacts, (iv) The analysis that helps designing monetary and macroprudential policy should include global aggregates to capture the global economic and financial context.

Suggested Citation

  • Bruni, Franco & Lopez, Claude, 2019. "Monetary Policy and Financial System Resilience," MPRA Paper 92880, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:92880
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    File URL: https://mpra.ub.uni-muenchen.de/92880/1/MPRA_paper_92880.pdf
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    References listed on IDEAS

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    3. Lars E. O. Svensson, 2018. "Monetary policy and macroprudential policy: Different and separate?," Canadian Journal of Economics, Canadian Economics Association, vol. 51(3), pages 802-827, August.
    4. Thierry Bracke & Matthieu Bussière & Michael Fidora & Roland Straub, 2010. "A Framework for Assessing Global Imbalances," The World Economy, Wiley Blackwell, vol. 33(9), pages 1140-1174, September.
    5. Borio, Claudio, 2014. "The financial cycle and macroeconomics: What have we learnt?," Journal of Banking & Finance, Elsevier, vol. 45(C), pages 182-198.
    6. Bruni, Franco & Siaba Serrate, José & Villafranca, Antonio, 2018. "The quest for global monetary policy coordination," Economics Discussion Papers 2018-59, Kiel Institute for the World Economy (IfW Kiel).
    7. Claudio Borio & Piti Disyatat, 2011. "Global imbalances and the financial crisis: Link or no link?," BIS Working Papers 346, Bank for International Settlements.
    8. Lopez, Claude & Markwardt, Donald & Savard, Keith, 2015. "Macroprudential Policy: A Silver Bullet or Refighting the Last War?," MPRA Paper 64499, University Library of Munich, Germany.
    9. Loretta J. Mester, 2016. "Five Points About Monetary Policy and Financial Stability (06-04-2016) Sveriges Riksbank Conference on Rethinking the Central Bank’s Mandate, Stockholm, Sweden," Speech 72, Federal Reserve Bank of Cleveland.
    10. Bruni, Franco & Siaba Serrate, José & Villafranca, Antonio, 2019. "The quest for global monetary policy coordination," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 13, pages 1-16.
    11. Thierry Bracke & Matthieu Bussière & Michael Fidora & Roland Straub, 2008. "A framework for assessing global imbalances," Occasional Paper Series 78, European Central Bank.
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    1. Lopez, Claude & Bruni, Franco, 2019. "The Macroprudential Policy Framework Needs to Be Global," MPRA Paper 92881, University Library of Munich, Germany.

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    More about this item

    Keywords

    Financial system resilience;

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F5 - International Economics - - International Relations, National Security, and International Political Economy

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