Years after the biggest global financial meltdown since the Great Depression spurred debate over how policy makers can head off asset bubbles, tentative evidence is emerging from Asia-Pacific economies that prudent regulation can prove effective.
From Singapore to Sydney to Seoul, regulators have implemented prudential rules that target house-price inflation at the same time as they deliver stimulus to their economies through monetary policy. As the list of countries dropping rates toward zero lengthens, macroprudential measures, once out of favour in the developed world, are staging a comeback.
“Asia has been a pioneer in macroprudential measures,” said Frederic Neumann, co-head of Asian economic research at HSBC Holdings Plc in Hong Kong. “Ideally the region would’ve had higher interest rates in recent years to cool down speculative pressure, but that wasn’t possible. So this was a substitute and early signs are it seems to have worked.”
The crux of the debate over macroprudential measures harks back to an argument from former Federal Reserve Chairman Alan Greenspan that a central bank could clean up the mess from financial excesses, not prevent it.
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From Singapore to Sydney to Seoul, regulators have implemented prudential rules that target house-price inflation at the same time as they deliver stimulus to their economies through monetary policy. As the list of countries dropping rates toward zero lengthens, macroprudential measures, once out of favour in the developed world, are staging a comeback.
“Asia has been a pioneer in macroprudential measures,” said Frederic Neumann, co-head of Asian economic research at HSBC Holdings Plc in Hong Kong. “Ideally the region would’ve had higher interest rates in recent years to cool down speculative pressure, but that wasn’t possible. So this was a substitute and early signs are it seems to have worked.”
The crux of the debate over macroprudential measures harks back to an argument from former Federal Reserve Chairman Alan Greenspan that a central bank could clean up the mess from financial excesses, not prevent it.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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