Macroprudential policy in the GCC countries / prepared by Zsofia Arvai, Ananthakrishnan Prasad and Kentaro Katayama.

By:

Árvai, Zsófia

Contributor(s):

Material type: Text

TextSeries: IMF staff discussion note ; SDN/14/01.Publication details: [Washington, D.C.] : International Monetary Fund, [2014]Description: 1 online resource (48 pages)Content type:

text

Media type:

computer

Carrier type:

online resource

ISBN:

9781475527735
147552773X

Subject(s): Genre/Form:

Electronic books.

DDC classification:

332.109174927 23

LOC classification:

HG187.3 .A78 2014eb

Online resources:

EBSCOhost

Summary: As undiversified commodity exporters, GCC economies are prone to pro-cyclical systemic risk in the financial system. During periods of high hydrocarbon prices, favorable economic prospects make the financial sector keen to lend, leading to higher domestic credit growth and easier access to external financing. Fiscal policy is a very important tool for macroeconomic management, but due to the significant time lags and expenditure rigidities, it has not been a flexible enough tool to prevent credit booms and the build-up of systemic risk in the GCC. This, together with limited monetary policy independence because of the pegged exchange rate, means that macro-prudential policy has a particularly important role in limiting systemic risk in the financial system. This importance is reinforced by the underdeveloped financial markets in the region that provide limited risk management tools and shortcomings in crisis resolution frameworks. This paper will discuss the importance of macro-prudential policy in the GCC countries, look at the experience with macro-prudential policies in the boom/bust cycle in the second half of the 2000s, and use the broad frameworks being developed in the Fund and elsewhere to discuss ways existing frameworks and policy toolkits in the region can be strengthened given the characteristics of the GCC.

Holdings ( 1 )
Title notes ( 5 )

Holdings
Item type	Current library	Collection	Call number	Status	Date due	Barcode	Item holds
eBook	e-Library	EBSCO Business		Available

Total holds: 0

At head of title: Middle East and Central Asia Department.

Includes bibliographical references.

As undiversified commodity exporters, GCC economies are prone to pro-cyclical systemic risk in the financial system. During periods of high hydrocarbon prices, favorable economic prospects make the financial sector keen to lend, leading to higher domestic credit growth and easier access to external financing. Fiscal policy is a very important tool for macroeconomic management, but due to the significant time lags and expenditure rigidities, it has not been a flexible enough tool to prevent credit booms and the build-up of systemic risk in the GCC. This, together with limited monetary policy independence because of the pegged exchange rate, means that macro-prudential policy has a particularly important role in limiting systemic risk in the financial system. This importance is reinforced by the underdeveloped financial markets in the region that provide limited risk management tools and shortcomings in crisis resolution frameworks. This paper will discuss the importance of macro-prudential policy in the GCC countries, look at the experience with macro-prudential policies in the boom/bust cycle in the second half of the 2000s, and use the broad frameworks being developed in the Fund and elsewhere to discuss ways existing frameworks and policy toolkits in the region can be strengthened given the characteristics of the GCC.

Online resource; title from PDF title page (IMF Web site, viewed).

Added to collection customer.56279.3 - Master record variable field(s) change: 072, 082