Challenges for Emerging Economy II
Second summer program in Armenia invites rising scholars to attend classes in mid July.
Honor Lecture
Prudential policy and systemic risk: the role of interconnections
Abstract: The impact of prudential policies in open economies depends not only on their intrinsic efficacy but also on the feedback of the policy through close financial partners. Using a dataset of advanced countries, we find that prudential policy measures reduce systemic risk in the financial system in the 2000-2014 time period.
We show that indirect effect in case of uniform interventions enforces the direct one and accounts for up to 87% of total risk reduction. The policies though remain insignificant for GIIPS countries which stay dependent on actions and responses of their financial counterparties.
Madina Karamysheva
Assistant Professor