A Macroprudential Approach to Financial Supervision and Monetary Policy in Emerging Economies

Abstract

This paper attempts to define, construct a policy framework, and analyze interactions with monetary policy of macroprudential policy. The available pieces of evidence suggest that the effects of the LTV and DTI regulations for financial stability are rather unclear in Korea. It also shows that when financial markets exhibit instability in a stable inflationary environment, macroprudential policy could run into conflict with monetary policy. This paper proposes an appropriate modality of macroprudential policy to minimize the potential conflict with monetary policy.

Keywords

• Macro and Microprudential Policy(거시 및 미시 건전성 감독)
• Procyclicality(통화신용정책)
• Monetary Policy(경기순응적 대출)
• LTV
• DTI