Waterbed effects of macroprudential policies: Evidence on cross-sector substitution
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| Publication date | 05-11-2019 |
| Publisher | VOX |
| Organisations |
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| Abstract | Macroprudential policies are being implemented around the globe. A key question is whether these policies prompt substitution toward the non-bank financial sector. This column presents compelling evidence of such ‘waterbed effects’ after macroprudential policy action. Substitution towards non-bank credit is stronger when policy measures applied to banks are binding and are implemented in countries with well-developed financial markets. While systemic risks may nonetheless decline, waterbed effects highlight the importance of developing macroprudential policies beyond banking. |
| Document type | Web publication or website |
| Language | English |
| Published at | https://voxeu.org/article/waterbed-effects-macroprudential-policies |
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Waterbed effects of macroprudential policies
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