Global banking, financial spillovers and macroprudential policy coordination

The transmission of financial shocks and the gains from international macroprudential policy coordination are studied in a two-region, core–periphery model with global bank, two-level structure imperfect integration. replicates stylized facts associated banking shocks, respect to output, credit, house prices real exchange rate fluctuations recipient countries, as documented empirically. Numerical experiments, based on parametrized version model, show that increase degree integration, which raises scope for spillback effects periphery core, through trade private capital flows. However, even when is Pareto-improving, resulting may be highly asymmetric across regions.