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Macroprudential Policies for a Resource Rich Economy The Case of Mongolia
Author:
Mr. Rodolfo Maino
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,
Patrick A. Imam
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, and
Mr. Yasuhisa Ojima
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Series:
IMF Working Papers
Volume/Issue:
Volume 2013: Issue 018
Language:
English
Publication Date:
22 Jan 2013
DOI:
https://doi.org/10.5089/9781475594881.001
ISBN:
9781475594881
ISSN:
1018-5941
Pages:
47
Keywords:
WP; financial system; Mongolia; monetary policy; foreign exchange; Macroprudential Policies; Macrofinancial Linkages; Systemic Risk; Mongolia context; heightened risk appetite; cost of capital; Mongolia's financial system; bank financial system regulator; resource allocation; banking system in Mongolia; monetary policy tool; natural resource curse; risk identification; inflation rate; Financial sector stability; Macroprudential policy; Credit; Commercial banks; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper explores the extent to which macroprudential tools can be used to manage banking sector risks in Mongolia, a commodity producing country exposed to both procyclical and cross-sectional financial sector risks. Loose fiscal policy, rising credit activity, and heightened risk appetite—attributable to the commodity boom—are fuelling price volatility in asset markets, posing significant risks to financial stability if left unchecked. Rising interconnectedness, potential increase in dollarization and concentrated exposures are compounding those risks. Macroprudential tools can complement fiscal and monetary policy adjustments to avoid the buildup of vulnerabilities in the banking sector.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund