Strengthening Macroprudential Policies in Emerging Asia

Adapting to Green Goals and Fintech

image of Strengthening Macroprudential Policies in Emerging Asia

Many Emerging Asian countries have been refining macroprudential policies, particularly since the Global Financial Crisis. For instance, they have developed policies targeting housing markets and broadly transposed the Basel III requirements into their national legislation. In the wake of the COVID-19 pandemic, policy makers now need to identify emerging vulnerabilities and their associated financial stability risks and respond with the appropriate macroprudential tools.

This publication provides a detailed overview of the current macroprudential policy situation in Emerging Asian countries and explores how the macroprudential policy toolkit has evolved. The report discusses some of the most pressing challenges to financial stability, including the interaction of macroprudential policy with other policies. It also devotes special attention to macroprudential policies for emerging priorities, such as achieving green goals and updating regulatory frameworks to reflect ongoing Fintech developments. Climate change will indeed create new challenges in financial markets, while Fintech developments bring about many economic opportunities and deepen financial systems, but present a variety of novel risks requiring rapid policy responses.


Overview: Strengthening macroprudential policies to adopt to green goals and Fintech in Emerging Asia

Macroprudential policy has an important role to play in supporting the transition to a low-carbon and digital economy. This Overview summarises the main points in the publication Strengthening Macroprudential Policies in Emerging Asia: Adapting to Green Goals and Fintech. Chapter 1 provides a comprehensive overview of the region’s experience with macroprudential policy and identifies the main challenges. Chapter 2 explores the systemic risks associated with climate change and stresses how countries in the region need to expand their macroprudential policy toolkits in order to tackle these risks and support low-carbon investments. Chapter 3 discusses new challenges related to the rise of Fintech and the importance of strengthening macroprudential policies to bring Fintech firms inside the regulatory perimeter.



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