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Policy Instruments to Lean Against the Wind in Latin America

Author

Listed:
  • Mr. G. Terrier
  • Mr. Rodrigo O. Valdes
  • Mr. Camilo E Tovar Mora
  • Mr. Jorge A Chan-Lau
  • Carlos Fernandez Valdovinos
  • Ms. Mercedes Garcia-Escribano
  • Mr. Carlos I. Medeiros
  • Man-Keung Tang
  • Miss Mercedes Vera Martin
  • W. Christopher Walker

Abstract

This paper reviews policy tools that have been used and/or are available for policy makers in the region to lean against the wind and review relevant country experiences using them. The instruments examined include: (i) capital requirements, dynamic provisioning, and leverage ratios; (ii) liquidity requirements; (iii) debt-to-income ratios; (iv) loan-to-value ratios; (v) reserve requirements on bank liabilities (deposits and nondeposits); (vi) instruments to manage and limit systemic foreign exchange risk; and, finally, (vii) reserve requirements or taxes on capital inflows. Although the instruments analyzed are mainly microprudential in nature, appropriately calibrated over the financial cycle they may serve for macroprudential purposes.

Suggested Citation

  • Mr. G. Terrier & Mr. Rodrigo O. Valdes & Mr. Camilo E Tovar Mora & Mr. Jorge A Chan-Lau & Carlos Fernandez Valdovinos & Ms. Mercedes Garcia-Escribano & Mr. Carlos I. Medeiros & Man-Keung Tang & Miss M, 2011. "Policy Instruments to Lean Against the Wind in Latin America," IMF Working Papers 2011/159, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2011/159
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    References listed on IDEAS

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