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Macroprudential regulation and bank behavior: Theory and evidence from a quasi-natural experiment

Ghosh, Saibal (2014): Macroprudential regulation and bank behavior: Theory and evidence from a quasi-natural experiment. Published in: Macroeconomics and Finance in Emerging Market Economies , Vol. 8, No. 1-2 (2015): pp. 138-159.

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Abstract

The paper examines the impact of macroprudential policies on bank credit growth. Towards this end, we develop a model of bank behavior which examines the possible impact of such policies. The testable propositions of the model are empirically examined using a natural experiment for India. The results appear to suggest that macroprudential policies interact with bank ownership to moderate the severity of the credit cycle.

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