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Macroprudential Policy: A Review

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  • Mahdi Ebrahimi Kahou
  • Alfred Lehar

    (Haskayne School of Business, University of Calgary)

Abstract

The severity and longevity of the recession caused by the 2007 financial crisis has highlighted the lack of a reliable macro-based financial regulation framework. As a consequence, addressing the link between the stability of the financial system as a whole and the performance of the overall economy has become a mandate for policymakers and scholars. Many countries have adopted macroprudential tools as policy responses for safeguarding the financial system. This paper provides a literature review of macroprudential policies, its objectives and the challenges that a macro-based framework needs to overcome, such as financial stability, procyclicality, and systemic risk.

Suggested Citation

  • Mahdi Ebrahimi Kahou & Alfred Lehar, 2015. "Macroprudential Policy: A Review," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 8(34), October.
    • Handle: RePEc:clh:resear:v:8:y:2015:i:34
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