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Economics Seminar Series with Robert Stewart-FR

Author: myUNB News

Posted on Nov 16, 2018

Category: News and Notices

Please join us for the following instalment of the Department of Economics Seminar Series: "Does Macroprudential Regulation Promote Economic Resilience against Systematic Banking Crises? Evidence from Panel Data" with Robert Stewart, University of West Indies and UNB, on Friday, Nov. 23 at 3 p.m. in Singer Hall, 449.


Financial stability continues to receive heightened attention since the Global Financial Crisis, circa 2008. An important dimension of financial stability is the construction and use of macroprudential regulatory tools. This work investigates the effectiveness of such tools along two dimensions: (i) promoting economic growth and; (ii) providing resilience against financial distress. A dynamic panel data model is employed within a system GMM estimation framework, using a global dataset for the period 1995-2015. The results indicate that there are important trade-offs to consider between driving finance induced economic growth, and maintaining financial stability. Notwithstanding these trade-offs, the results point to the banking z-score as a tool that both promotes long-run growth and resilience. The banking z-score has a positive effect on economic growth and also attenuates the impact of financial crises. This suggests that more emphasis should be placed on improving the banking z-score of financial institutions.

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