engleski

Operational framework of monetary and macroprudential policy in small open and euroised economy: Case of Croatia

The recent global financial crisis has drawn attention to various factors of financial instability including the pro-cyclicality of banks’ lending activity, the pro-cyclicality in asset price movements, the vulnerability of small open developing countries on internal and external shocks associated with sudden inflow and outflow of foreign capital etc. All this engenders the behaviour that is impossible to shape by standard instruments of monetary policy and microprudential measures alone without taking into account the accumulation and materialization factors of systemic risk in the financial system at whole. A general consensus is that a macroprudential approach should be adopted with more direct influence on the supply of loans, the quantity and quality of bank capital and maintaining an adequate level of bank short-term and long-term sources of liquidity. In cases of small open economies it also involves instruments characterized by quasi capital controls, limitations of currency mismatches between bank assets and liabilities (especially in the case of countries with high level of financial euroisation) as well as the implementation of specific non-standard instruments with stronger effects on the growth of bank claims in periods of business upswings and downswings.

monetary policy; macroprudential policy; financial stability; Croatian monetary and banking system

nije evidentirano