Managing Non-Core Liabilities and Leverage of the Banking System : A Building Block for Macroprudential Policy Making in Korea /

Korea has been active in implementing targeted macroprudential policies to address specific financial stability concerns. In this paper, we develop a conceptual model that could serve as a building block for the broader framework of macroprudential policy making in Korea. It is assumed that the poli...

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Bibliographic Details
Main Author: Alichi, Ali
Other Authors: Hong, Cheol, Ryoo, Sang Chul
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2012.
Series:IMF Working Papers; Working Paper ; No. 2012/027
Online Access:Full text available on IMF
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520 3 |a Korea has been active in implementing targeted macroprudential policies to address specific financial stability concerns. In this paper, we develop a conceptual model that could serve as a building block for the broader framework of macroprudential policy making in Korea. It is assumed that the policy maker imposes taxes on key aggregate financial ratios in the banking system to mitigate excessive leverage over the economic cycle. The model is calibrated for Korea. The results illustrate how countercyclical tools, such as simple taxes on key financial ratios, could be incorporated to enrich the broader macroprudential policy framework in the Korean context. 
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700 1 |a Hong, Cheol. 
700 1 |a Ryoo, Sang Chul. 
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