Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/173364 
Year of Publication: 
2016
Series/Report no.: 
Bank of Canada Staff Discussion Paper No. 2016-11
Publisher: 
Bank of Canada, Ottawa
Abstract: 
This paper reviews the Canadian and international evidence of the effectiveness of macroprudential policy measures in building resilience and mitigating financial imbalances. The analysis concludes that these measures have broadly achieved their goal of increasing the overall resilience of the financial system to the buildup of imbalances and increasing the financial system's ability to withstand adverse shocks. However, evidence of their effectiveness in providing countercyclical stabilization by curbing credit growth ("leaning against the financial cycle") is limited. Among the different types of macroprudential measures, those that are "sectoral" in nature and/or those that target borrowers are most effective in leaning against the financial cycle. Overall, the observed effectiveness of macroprudential tools in addressing systemic risk implies that these policies can be complementary to monetary policy in achieving the goals of macroeconomic and financial stability.
Subjects: 
Financial stability
Financial system regulation and policies
Credit and credit aggregates
JEL: 
E51
E58
G18
G28
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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