Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/175733
Authors: 
Beyer, Andreas
Nicoletti, Giulio
Papadopoulou, Niki
Papsdorf, Patrick
Rünstler, Gerhard
Schwarz, Claudia
Sousa, João
Vergote, Olivier
Year of Publication: 
2017
Series/Report no.: 
ECB Occasional Paper 191
Abstract: 
This paper investigates the interrelations between monetary, macro- and microprudential policies. It first provides an overview of the three policies, starting with their main instruments and objectives. Monetary policy aims at maintaining price stability and promoting balanced economic growth, macroprudential policies aim at safeguarding the stability of the overall financial system, while microprudential policies contribute to the safety and soundness of individual entities. Subsequently, the paper provides a simplified description of their respective transmission mechanisms and analyses the interactions between them. A conceptual framework is first presented on the basis of which the analysis of the interactions across the different policies can be demonstrated in a stylised manner. These stylised descriptions are then further complemented by model-based simulations illustrating the significant complementarities and interactions between them. Finally, the paper concludes that from a conceptual point of view there are numerous areas of interaction between the policies. These create scope for synergies, which can be reaped by sharing information and expertise across the various policy areas.
Subjects: 
Central bank policies
non-standard measures
banking
financial regulation
DSGE models
JEL: 
E58
G28
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-2853-3
Document Type: 
Research Report

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