The role of macro-prudential policies in the boom and adjustment phase of the credit cycle in Estonia
AbstractThe Estonian economy experienced an unusually long business and credit cycle during the first decade of the 21st century. The magnitude of the cycle tested what can be achieved by traditional policy tools and the limits of macro-prudential policies. The country's financial sector, almost fully consisting of foreign banks, displayed the complexities of cross-border regulation and supervision. Capital and liquidity requirements that were stricter than international minimums, as well as the build-up of fiscal buffers, were instrumental to engineering an orderly adjustment. Openness and integration, including well-advanced cross-border cooperation, were equally important in maintaining financial stability throughout the global financial crisis.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 5835.
Date of creation: 01 Oct 2011
Date of revision:
Banks&Banking Reform; Access to Finance; Debt Markets; Emerging Markets; Bankruptcy and Resolution of Financial Distress;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-15 (All new papers)
- NEP-BAN-2011-10-15 (Banking)
- NEP-MAC-2011-10-15 (Macroeconomics)
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