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Macroprudential regulation and bank behavior: Theory and evidence from a quasi-natural experiment

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  • Ghosh, Saibal

Abstract

The paper examines the impact of macroprudential policies on bank credit growth. Towards this end, we develop a model of bank behavior which examines the possible impact of such policies. The testable propositions of the model are empirically examined using a natural experiment for India. The results appear to suggest that macroprudential policies interact with bank ownership to moderate the severity of the credit cycle.

Suggested Citation

  • Ghosh, Saibal, 2014. "Macroprudential regulation and bank behavior: Theory and evidence from a quasi-natural experiment," MPRA Paper 65214, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:65214
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    References listed on IDEAS

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    Cited by:

    1. Ghosh, Saibal, 2017. "Does central bank governors term in office matter for macroprudential policies? Evidence from MENA banks," Research in International Business and Finance, Elsevier, vol. 40(C), pages 34-51.

    More about this item

    Keywords

    Macroprudential policies; Banking; India; Risk weights; Provisions;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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