Policy Instruments to Lean Against the Wind in Latin America

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Author/Editor: G. Terrier, Rodrigo O. Valdes, Camilo Ernesto Tovar Mora, Jorge A. Chan-Lau, Carlos Fernandez Valdovinos, Mercedes Garcia-Escribano, Carlos I. Medeiros, Man-Keung Tang, Mercedes Vera Martin, W. Christopher Walker
Release Date: © July, 2011
ISBN : 978-1-45529-772-6
Stock #: WPIEA2011159
Stock Status: On back-order

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This paper reviews policy tools that have been used and/or are available for policy makers in the region to lean against the wind and review relevant country experiences using them. The instruments examined include: (i) capital requirements, dynamic provisioning, and leverage ratios; (ii) liquidity requirements; (iii) debt-to-income ratios; (iv) loan-to-value ratios; (v) reserve requirements on bank liabilities (deposits and nondeposits); (vi) instruments to manage and limit systemic foreign exchange risk; and, finally, (vii) reserve requirements or taxes on capital inflows. Although the instruments analyzed are mainly microprudential in nature, appropriately calibrated over the financial cycle they may serve for macroprudential purposes.


Economic policy , Fiscal policy , Foreign exchange , Monetary policy

More publications in this series: Working Papers

More publications by: G. Terrier ; Rodrigo O. Valdes ; Camilo Ernesto Tovar Mora ; Jorge A. Chan-Lau ; Carlos Fernandez Valdovinos ; Mercedes Garcia-Escribano ; Carlos I. Medeiros ; Man-Keung Tang ; Mercedes Vera Martin ; W. Christopher Walker