Policy Instruments To Lean Against The Wind In Latin America
International Monetary Fund
Download Document| Date Published | 2011 |
| Version | IMF Working Paper 11/159 |
| Primary Author | Gilbert Terrier |
| Other Authors | Rodrigo Valdés, Camilo E. Tovar, Jorge Chan- Lau, Carlos Fernández-Valdovinos, Mercedes García- Escribano, Carlos Medeiros, Man-Keung Tang, Mercedes Vera Martin, and Chris Walker |
| Theme | Regulation and Supervision of Housing Finance Systems |
| Country |
Abstract
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.