Abstract
The paper analyses the effects of world uncertainty on the level of domestic credit growth rate and the role of macro-prudential policies (Mapps) in mitigating these effects in a panel of 33 countries under different exchange rate regimes. A higher level of world uncertainty decreases the level of domestic credit under both fixed- and flexible-exchange rate regimes, but these spill-over effects are higher for countries with fixed-exchange rate regimes. The Mapps have a significant impact on financial conditions and help to achieve long-term financial stability, but only for countries under the flexible-exchange regime. It remains completely ineffective for the fixed-exchange economies.
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