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- W2345553820 abstract "We study the macroprudential roles of bank capital regulation and monetary policy in a borrowing cost channel model with endogenous financial frictions, driven by credit risk, bank losses and bank capital costs. These frictions induce financial accelerator mechanisms and motivate the examination of a macroprudential toolkit. Following credit shocks, countercyclical regulation is more effective than monetary policy in promoting price, financial and macroeconomic stability. For supply shocks, combining macroprudential regulation with a stronger anti-inflationary policy stance is optimal. The findings emphasize the importance of the Basel III accords in alleviating the output-inflation trade-off faced by central banks, and cast doubt on the desirability of conventional (and unconventional) Taylor rules during periods of financial distress." @default.
- W2345553820 created "2016-06-24" @default.
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- W2345553820 date "2016-10-01" @default.
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- W2345553820 title "Macroprudential regulation, credit spreads and the role of monetary policy" @default.
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- W2345553820 doi "https://doi.org/10.1016/j.jfs.2016.08.001" @default.
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