Abstract

Purpose – This paper aims to examine the impact of macroprudential policies (MPPs) on credit growth. Towards this end, the author uses quarterly data on Indian commercial banks for the period 2002:1 to 2012:1 that subsume the imposition of MPPs. Design/methodology/approach – The analysis uses the dynamic panel data (DPD) methodology to test the relevant hypotheses regarding the interlinkage between credit growth, bank ownership and MPPs. The DPD methodology has the advantage of being able to address the endogeneity between credit growth and macroprudential regulation. Findings – The results appear to suggest that MPPs targeted on provisions are relatively more effective in limiting credit expansion. When considered in conjunction with bank ownership, they appear to have much more force in moderating the severity of the credit cycle. Research limitations/implications – The lack of an extensive database on the relevant variables might hinder the robustness of the results. It is possible that MPPs are effect...

Full Text
Paper version not known

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.