This paper quantitatively examines the effects of macroprudential policies on credit growth in open economies. We develop a small open economy DSGE model where banks choose their funding sources (domestic vs. foreign deposits) and subject to financial constraints. Our model predicts that banks...

The last three decades have been marked by financial market globalisation and a higher degree of integration of emerging markets into the world economy. One distinct feature of this in integration has been a sharp increase in portfolio flows between advanced and emerging market countries. Since...

The effectiveness of macro-prudential policies to mitigate credit cycles and reduce capital flow volatility is at the center of policy debates. In this chapter, we investigate the factors which influence the performance of macro-prudential tools by focusing on institutions, financial structure,...