IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this book

Macro-Financial Links and Monetary Policy Management

Listed author(s):
  • Nephil Matangi Maskay

For the past few decades, the nature of links between financial conditions and the real macro economy (the macro-financial link) has changed. The links have expanded and deepened significantly due mainly to the following two reasons. Firstly, financial liberalisation has expanded the availability of financial products and services, increasing the connection between financial markets, which in turn, has enhanced the channels through which financial conditions affect the real macro economy. Secondly, financial globalisation has amplified the adverse effect of financial contagion from one country to another, and subsequently, a financial crisis or turmoil in one country tends to easily affect the financial markets and the real macro economy of other countries through the above mentioned macro-financial links. The current US sub-prime mortgage crisis is a case in point of how the US financial crisis adversely affected, not only its domestic financial system and economy, but also the global financial system and economy. However, the current understanding of how the financial conditions affect the real macro economy seems to be insufficient. In particular, it is becoming more important to comprehend how monetary policy influences financial conditions. In light of these issues, this study explores the implication and nature of macro- financial links of SEACEN central bank policies and reviews the experiences of participating countries. The study highlights that the function of allocation of resources in some SEACEN members has expanded and broadened beyond that of the monetary and financial system as a whole. This suggests that monetary policy management needs to be better coordinated and fine-tuned. The paper thus proposes that the country-specific formulation and implementation of monetary policy should be coordinated with financial policy.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

in new window

This book is provided by South East Asian Central Banks (SEACEN) Research and Training Centre in its series Research Studies with number rp78 and published in 2010.
ISBN: 983-9478-82-6
Handle: RePEc:sea:rstudy:rp78
Contact details of provider: Postal:
Level 5, Sasana Kijang, Bank Negara Malaysia, 2 Jalan Dato? Onn, 50480 Kuala Lumpur

Phone: 603-9195 1888
Fax: 603-9195 1801
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. Michael B Devereux & James Yetman, 2010. "Financial deleveraging and the international transmission of shocks," BIS Papers chapters,in: Bank for International Settlements (ed.), The international financial crisis and policy challenges in Asia and the Pacific, volume 52, pages 274-298 Bank for International Settlements.
  2. Markus K. Brunnermeier, 2009. "Deciphering the Liquidity and Credit Crunch 2007-2008," Journal of Economic Perspectives, American Economic Association, vol. 23(1), pages 77-100, Winter.
  3. Byström, Hans N. E., 2005. "Credit Default Swaps and Equity Prices: The Itraxx CDS Index Market," Working Papers 2005:24, Lund University, Department of Economics, revised 15 May 2005.
  4. Don H Kim & Mico Loretan & Eli M Remolona, 2010. "Contagion and risk premia in the amplification of crisis: evidence from Asian names in the global CDS market," BIS Papers chapters,in: Bank for International Settlements (ed.), The international financial crisis and policy challenges in Asia and the Pacific, volume 52, pages 318-339 Bank for International Settlements.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:sea:rstudy:rp78. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Yunyee)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.