Macroprudential Regulations in Andean Countries
Peer Reviewed
Date issued
Jan 2013
Subject
Financial Crisis and Structural Adjustement;
Financial Risk;
Monetary Policy;
Financial Policy;
Financial Service
JEL code
E44 - Financial Markets and the Macroeconomy;
G21 - Banks • Depository Institutions • Micro Finance Institutions • Mortgages;
G28 - Government Policy and Regulation;
G32 - Financing Policy • Financial Risk and Risk Management • Capital and Ownership Structure • Value of Firms • Goodwill;
G38 - Government Policy and Regulation
Country
Peru;
Bolivia;
Colombia;
Venezuela;
Ecuador
Category
Policy Briefs
The importance of having in place a financial regulatory framework that includes macro-prudential regulations was fully recognized during the recent global financial crisis. A central lesson from that episode was that relying on regulations that solely assessed the risks that financial institutions were taking on their individual balance sheets (a micro-prudential approach) was inadequate to preserve financial system stability. This policy brief deals with advances in the Andean countries regarding the implementation of macro-prudential financial regulations; that is, regulations that take into account risks at the systemic level. We focus specially on three regulatory tools: liquidity requirements, counter-cyclical capital requirements and counter-cyclical loan-loss provisioning requirements.
