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Monetary policy and macroprudential regulation : whither emerging markets

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  • Canuto, Otaviano
  • Cavallari, Matheus
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    Abstract

    Confidence in combining inflation-targeting-cum-flexible-exchange-rate regimes with isolated microprudential regulation as a means to guarantee both macroeconomic and financial stability has been shattered by the scale and synchronization of asset price booms and busts that preceded the current global financial crisis. This paper has a two-fold purpose. On the one hand, it explores the implications and challenges of acknowledging the need for coordination between monetary policies and macroprudential regulation. On the other, it points out specific challenges currently faced by central bankers in emerging economies, as they cope with policy and regulatory coordination in a context of debt overhang and unconventional monetary policies in advanced economies.

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6310.

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    Date of creation: 01 Jan 2013
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    Handle: RePEc:wbk:wbrwps:6310

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    Keywords: Currencies and Exchange Rates; Debt Markets; Emerging Markets; Economic Theory&Research; Banks&Banking Reform;

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    Cited by:
    1. Otaviano Canuto & Matheus Cavallari, 2013. "Asset Prices, Macro Prudential Regulation, and Monetary Policy," World Bank Other Operational Studies 16116, The World Bank.

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