Finance, growth and (macro)prudential policy: European evidence

This paper examines the interactions between financial development, economic growth and (macro)prudential policy on a sample of 12 euro area countries. Our main takeaway is that active supports positive finance-growth nexus instead disrupting it. These benefits are found to be more likely materialize during tightening measures not easing. result conditional ability curb excess credit mitigate systemic risk, which would otherwise disrupt market. Moreover, we assert when analysing effects policy, it important account for direction measures, just frequency at they implemented.