How prudent are macro-prudential policies?

How prudent are macro-prudential policies? (At the London School of Economics)

NZ-UK Link Foundation Visiting Professor Arthur Grimes

Chair: Professor Charles Goodhart, LSE; Respondent: Professor David C Webb, LSE

Central banks and international financial organisations are working to create or resurrect a
range of macro-prudential policies to supplement monetary policy. Some of the arguments buttressing the contribution that macro-prudential policies can make to financial stabilisation appear plausible. This lecture draws on the historical record to examine whether we should expect these policies to work in stabilising the financial system and/or asset markets, and examines what fish-hooks may arise with their application. The experience of New Zealand which, prior to 1984, heavily utilised macro-prudential policies provides a warning not to expect too much from some of these instruments.

Author: 
School of Advanced Study
Speaker(s): 
NZ-UK Link Foundation Visiting Professor Arthur Grimes Chair: Professor Charles Goodhart, LSE; Respondent: Professor David C Webb, LSE
Organisations: 
Event date: 
Thursday, 14 November 2013 - 12:00am