The Great Financial Crisis of 2007-09 confirmed the vital importance of advancing our understanding of macrofinancial linkages, the two-way interactions between the real economy and the financial sector. The crisis was a bitter reminder of how sharp fluctuations in asset prices, credit and...

This paper assesses the determinants of foreign exchange (FX) reserves in emerging market economies (EMEs). First, it reviews the drivers behind reserve accumulation and the metrics used to evaluate reserve adequacy. We argue that precautionary motives, at least until early 2000s, were the main...

This paper evaluates the effectiveness of macroprudential policies in five Asia-Pacific countries (Australia, Indonesia, New Zealand, the Philippines and Thailand). We use supervisory bank-level data and apply a common empirical strategy. We find that macroprudential policies are effective in...

The great financial crisis of 2007-08 and the recession have generated active debate on the role of financial systems on the real economy. In particular, central banks have shown increased interest in how financial systems can evolve to maximise their contribution to the real economy. Many...

Macroprudential policy in Colombia is described along with a discussion of the main challenges faced by the authorities in implementing it and a review of episodes in which macroprudential measures were taken. An overview and some estimates of their effectiveness in preventing the buildup of...

Emerging market central banks have a long history of using macroprudential instruments. In the aftermath of the Asian crisis, central banks in the region deployed macroprudential tools first to deal with the fallout of crisis and then to prevent vulnerabilities from building up again. Similarly,...

This paper examines the macroeconomic and microeconomic dimensions of systemic risk. The design of practical macroprudential policies to address such risks is complex. Issues to be tackled include: (a) statistics to accurately measure currency and maturity mismatches (which usually lie at the...

Economic and financial integration has reshaped the monetary policy frameworks and transmission channels in the emerging market economies (EMEs) over the past two decades. Economic and financial linkages have become stronger, resulting in greater synchronization of business cycles across...

This volume features eight papers written for the conference quot;Financial market developments and their implications for monetary policyquot;. The event was jointly organised by the BIS Representative Office for Asia and the Pacific and Bank Negara Malaysia in Kuala Lumpur on 13 August 2007....