Norges Bank

Working Paper

The interaction between macroprudential and monetary policies: The cases of Norway and Sweden

Author:
Jin Cao, Valeriya Dinger, Anna Grodecka-Messi, Ragnar Juelsrud and Xin Zhang
Series:
Working Paper
Number:
8/2020

Abstract

To shed light on the interaction between macroprudential and monetary policies, we study the inward transmission of foreign monetary policy in conjunction with domestic macroprudential and monetary policies in Norway and Sweden. Using detailed bank-level data we show how Norwegian and Swedish banks' lending reacts to monetary policy surprises arising abroad, controlling for the domestic macroprudential stance and the interaction between monetary and macroprudential policies. In both countries, the domestic macroprudential policy helps mitigate the effects arising after foreign monetary surprises.

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ISSN 1502-8190 (online)

Published 7 July 2020 12:00
Published 7 July 2020 12:00