Have Domestic Prudential Policies Been Effective? Insights from Bank-Level Property Loan Data

This study examines the effectiveness of changes in domestic macroprudential policies in restraining the growth of real loan commitments by universal, commercial and thrift banks to the non-financial sector in the Philippines. In recent findings, the use of domestic prudential policies to promote financial stability and prevent the occurrence of financial crises, which in turn prevent output losses associated with macroeconomic and financial volatility and financial crises, has been highlighted. The use of macroprudential tools to promote financial stability has likewise allowed many central banks to keep monetary policy focused on its primary objective of maintaining price stability. This has helped enhance monetary policy's credibility in this area. In turn, central banks have recognised that financial stability policy interacts with and influences banking regulations as well as monetary policy actions, implying that central banks need to consider the extent of policy interactions.Full Publication: "https://ssrn.com/abstract=3550125" Measuring the Effectiveness of Macroprudential Policies Using Supervisory Bank-Level Data