Commentary on Macroprudential Policies

Abstract

This commentary is motivated by the papers “Banks’ Equity Capital Frictions, Capital Ratios, and Interest Rates: Evidence from Spanish Banks” by Alfredo Martin-Oliver, Sonia Ruano, and Vicente Salas-Fum´as (this issue) and “Capital Flows and Financial Stability: Monetary Policy and Macroprudential Responses” by D. Filiz Unsal (this issue): both papers focus on the implications of macroprudential policy measures. Indeed, recent events in macroeconomics and financial markets have shifted the attention towards the role and the consequences of policies aimed at preventing the occurrence of crisis events. The aforementioned papers are of topical interest and present insightful results from both a theoretical and empirical perspective. In my commentary I will first summarize the contributions of the two papers and then provide an overview of the fast-growing theoretical literature on macroprudential policy and briefly discuss some issues and future directions.