Ren, Haocong2012-03-192012-03-192011-10-01https://hdl.handle.net/10986/3587The global financial crisis has focused much attention on procyclicality, particularly in the context of a macroprudential framework. This paper reviews a set of prudential measures that can be adopted by national authorities to deal with procyclicality and discusses issues in designing and implementing such measures. For developing countries, in addition to some general considerations on policy design and implementation, a range of issues may warrant special attention. These include the balance between financial stability and financial development objectives, selection and calibration of policy instruments according to national circumstances and taking into account data limitations and capacity constraints as well as other practical challenges, and continued efforts to improve supervisory independence, supervisory powers and analytical capacity and to ensure adequate resources in order to perform the required tasks. Given the limited practical experience with countercyclical prudential measures, developing countries (as well as developed countries) will have to ascend a learning curve and experiment with select instruments while carefully monitoring and evaluating their effectiveness over time before a framework matures.CC BY 3.0 IGOACCOUNTINGACCOUNTING PRINCIPLESACCOUNTING RULESACCOUNTING STANDARDACCOUNTING STANDARDSAMOUNT OF CREDITARBITRAGEASSET PRICEASSET PRICESAVAILABILITY OF CREDITBALANCE SHEETBANK FAILURESBANK OF ENGLANDBANK OF KOREABANK OF SPAINBANK PROFITSBANKING INSTITUTIONSBANKING SECTORBANKING SUPERVISIONBANKING SYSTEMBANKSBORROWERBUSINESS CYCLEBUSINESS CYCLESCAPACITY CONSTRAINTSCAPITAL ADEQUACYCAPITAL ALLOCATIONCAPITAL BASECAPITAL CONTROLCAPITAL CONTROLSCAPITAL FLOWCAPITAL FLOWSCAPITAL INFLOWSCAPITAL MARKETCAPITAL MOVEMENTSCAPITAL PLANNINGCAPITAL RATIOCAPITAL REQUIREMENTCAPITAL REQUIREMENTSCAPITAL STANDARDSCENTRAL BANKCOLLATERALCOMMODITIESCOMMODITYCOMMODITY PRICESCONSOLIDATED SUPERVISIONCONSUMER CREDITCONSUMER PROTECTIONCORPORATE GOVERNANCECREDIBILITYCREDIT ASSESSMENTCREDIT CARDCREDIT CARD DEBTCREDIT EXPANSIONCREDIT GROWTHCREDIT INSTITUTIONSCREDIT INTERMEDIATIONCREDIT LOSSCREDIT LOSSESCREDIT QUALITYCREDIT RATINGCREDIT RATING AGENCIESCREDIT RISKCREDITORCREDITOR RIGHTSCREDITORSCREDITWORTHINESSCROSS-BORDER CAPITALCURRENCYCURRENCY MISMATCHESDEBTDEBT SERVICEDEFAULT RISKDEFAULTSDERIVATIVESDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPING ECONOMIESDOMESTIC BANKSECONOMIC CONDITIONSECONOMIC PERFORMANCEEMERGING MARKETEMERGING MARKET ECONOMIESEQUITY CAPITALEXPOSURESEXTERNAL CREDIT RATINGSFAIR VALUEFINANCIAL ACCOUNTINGFINANCIAL ASSETFINANCIAL CRISISFINANCIAL DEEPENINGFINANCIAL DEVELOPMENTFINANCIAL INSTITUTIONFINANCIAL INSTITUTIONSFINANCIAL INSTRUMENTSFINANCIAL MARKETFINANCIAL REGULATIONFINANCIAL SECTORFINANCIAL SERVICESFINANCIAL STABILITYFINANCIAL STATEMENTSFINANCIAL STRESSFINANCIAL SYSTEMFINANCIAL SYSTEM STABILITYFINANCIAL SYSTEMSFINANCIAL TRANSACTIONSFISCAL POLICIESFISCAL POLICYFLOW OF CREDITFOREIGN BANKSHOST COUNTRIESHOST COUNTRYHOUSEHOLD INCOMEHOUSINGINCOME SMOOTHINGINFORMATION ASYMMETRYINFORMATION TECHNOLOGYINSTRUMENTINTANGIBLEINTANGIBLE ASSETSINTANGIBLESINTEREST RATEINTEREST RATESINTERNATIONAL ACCOUNTING STANDARDSINTERNATIONAL BANKINTERNATIONAL CAPITALINTERNATIONAL DEBATEINTERNATIONAL FINANCIAL INSTITUTIONSINTERNATIONAL STANDARDLAWSLEGAL FRAMEWORKLETTERS OF CREDITLIQUIDITYLIQUIDITY MANAGEMENTLOANLOAN AMOUNTLOAN QUALITYMACROECONOMIC CONDITIONSMACROECONOMIC MANAGEMENTMACROECONOMIC POLICIESMACROECONOMIC POLICYMANDATESMARKET RISKMARKET STRUCTUREMATURITYMIGRATIONMINIMUM CAPITAL REQUIREMENTMINIMUM CAPITAL REQUIREMENTSMONETARY AUTHORITIESMONETARY CONTROLMONETARY POLICYMORTGAGEMORTGAGE LOANSMORTGAGESNET OPERATING INCOMENON-PERFORMING LOANSOPEN ECONOMIESPOLICY RESPONSESPOLITICAL ECONOMYPORTFOLIOPORTFOLIOSPRICE MOVEMENTPRICE STABILITYPRIVATE SECTOR DEVELOPMENTPROBABILITY OF DEFAULTPRUDENTIAL REGULATIONPRUDENTIAL REQUIREMENTSRATING AGENCIESREAL INTERESTREAL INTEREST RATESREGULATORREGULATORSREGULATORY AUTHORITIESREGULATORY CAPITALREGULATORY ENVIRONMENTREGULATORY FRAMEWORKREGULATORY STRUCTUREREGULATORY TREATMENTSREPOREPO RATEREPOSRESERVERESERVE BANKRESERVE BANK OF INDIARESERVE REQUIREMENTSRESERVESRETAINED EARNINGSRISK EXPOSURERISK MANAGEMENTRISK MANAGEMENT SYSTEMSRISK WEIGHTED ASSETSRISK WEIGHTSSECURITIESSHORT-TERM CAPITALSMALL BANKSSOCIAL COSTSSOLVENCYSTANDARD ASSETSSTATISTICAL ANALYSISSUBSIDIARIESSUBSIDIARYSUPERVISION OF BANKSSUPERVISORY AUTHORITIESSUPERVISORY AUTHORITYSUPERVISORY POWERSUPERVISORY POWERSSUPPLY OF CREDITSYSTEMIC RISKTAXTAX DEDUCTIONTAX POLICIESTAX TREATMENTSTIER 1 CAPITALTRADINGTRANSACTIONTRANSPARENCYVOLATILITYWRITEOFFSWorld Bank10.1596/1813-9450-5823