The Interaction Between Domestic Monetary Policy and Macroprudential Policy in Israel
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arXiv
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| Auteurs principaux: | , , , , , , , |
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| Format: | Preprint |
| Publié: |
2025
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| _version_ | 1866909730983641088 |
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| author | Benchimol, Jonathan Gamrasni, Inon Kahn, Michael Ribon, Sigal Saadon, Yossi Ben-Ze'ev, Noam Segal, Asaf Shizgal, Yitzchak |
| author_facet | Benchimol, Jonathan Gamrasni, Inon Kahn, Michael Ribon, Sigal Saadon, Yossi Ben-Ze'ev, Noam Segal, Asaf Shizgal, Yitzchak |
| contents | The global financial crisis (GFC) triggered the use of macroprudential policies imposed on the banking sector. Using bank-level panel data for Israel for the period 2004-2019, we find that domestic macroprudential measures changed the composition of bank credit growth but did not affect the total credit growth rate. Specifically, we show that macroprudential measures targeted at the housing sector moderated housing credit growth but tended to increase business credit growth. We also find that accommodative monetary policy surprises tended to increase bank credit growth before the GFC. We show that accommodative monetary policy surprises increased consumer credit when interacting with macroprudential policies targeting the housing market. Accommodative monetary policy interacted with nonhousing macroprudential measures to increase total credit. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2508_07082 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | The Interaction Between Domestic Monetary Policy and Macroprudential Policy in Israel Benchimol, Jonathan Gamrasni, Inon Kahn, Michael Ribon, Sigal Saadon, Yossi Ben-Ze'ev, Noam Segal, Asaf Shizgal, Yitzchak General Economics Economics General Finance Applications The global financial crisis (GFC) triggered the use of macroprudential policies imposed on the banking sector. Using bank-level panel data for Israel for the period 2004-2019, we find that domestic macroprudential measures changed the composition of bank credit growth but did not affect the total credit growth rate. Specifically, we show that macroprudential measures targeted at the housing sector moderated housing credit growth but tended to increase business credit growth. We also find that accommodative monetary policy surprises tended to increase bank credit growth before the GFC. We show that accommodative monetary policy surprises increased consumer credit when interacting with macroprudential policies targeting the housing market. Accommodative monetary policy interacted with nonhousing macroprudential measures to increase total credit. |
| title | The Interaction Between Domestic Monetary Policy and Macroprudential Policy in Israel |
| topic | General Economics Economics General Finance Applications |
| url | https://arxiv.org/abs/2508.07082 |