Macroprudential policies, national culture, and bank systemic risk: A cross-country comparison

Abstract

Using a sample of 872 listed banks worldwide from 2001 to 2020, this article presents an empirical analysis of the effects and mechanisms of macroprudential policies on preventing systemic risk. The research finds that (1) the use of macroprudential policies significantly reduces systemic risk. Macroprudential policies reduce bank credit risk and systemic risk by reducing banks operating risk and improving their asset quality. (2) The effect of macroprudential policies has cross-national heterogeneity in terms of the national culture. Power distance, uncertainty avoidance, and long-termism in the national culture dimension help enhance the inhibitory effect of macroprudential policies on systemic risk, while individualistic cultures reduce the effect of macroprudential policies. Starting from the fundamental goal of macroprudential policies of preventing systemic risk, this article provides a theoretical basis and practical inspiration for modern financial governance and maintaining financial stability.