Dealing with Quantitative Easing Spillovers in East Asia: The Role of Institutions and Macroprudential Policy

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Main author: Saiki, Ayako
Other authors: Chantapacdepong, Pornpinun
Volz, Ulrich
Format: Monographs and Working Papers           
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id eprints-23194
recordtype eprints
institution SOAS, University of London
collection SOAS Research Online
language English
language_search English
description This paper explores the impact of advanced countries’ quantitative easing on emerging market economies (EMEs) and how macroprudential policy and good governance play a role in preventing potential financial vulnerabilities. We used confidential locational bank statistics data from the Bank for International Settlements to examine whether quantitative easing has caused an appreciation of EMEs’ currencies and how it has done so, and whether this has in turn boosted foreign-currency borrowing, thus making EMEs vulnerable to balance sheet and maturity mismatch problems. While focusing our analysis on East Asian economies, we compare them with Latin American economies, which were also major recipients of quantitative easing capital inflows. We found that government effectiveness plays an important role in curbing excessive borrowing when the exchange rate is overvalued.
format Monographs and Working Papers
author Saiki, Ayako
author_facet Saiki, Ayako
Chantapacdepong, Pornpinun
Volz, Ulrich
authorStr Saiki, Ayako
author_letter Saiki, Ayako
author2 Chantapacdepong, Pornpinun
Volz, Ulrich
author2Str Chantapacdepong, Pornpinun
Volz, Ulrich
title Dealing with Quantitative Easing Spillovers in East Asia: The Role of Institutions and Macroprudential Policy
publisher Asian Development Bank Institute Working Paper No. 604
publishDate 2016
url https://eprints.soas.ac.uk/23194/

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