The business cycle in a globalising new economy: Implications for bank regulation and monetary policy
Journal of Financial Regulation and Compliance
ISSN: 1358-1988
Article publication date: 1 June 2002
Abstract
This paper examines the implications for bank regulatory and monetary policy of the business cycle; the nature of which is being transformed by the forces of globalisation and the communication and information technology revolution. Asset price fluctuations and overinvestment appear to have become more common, and ‘cheap money’ has been a causal factor. More risk‐related ‘Basel’ bank capital adequacy requirements, combined with more rigorous bad loan provisioning policies and ‘marking to market’ will result in bank regulation amplifying cycles. Hence, monetary policy must be closely coordinated with bank regulation policy to attenuate the cycle and the impact of asset price fluctuations.
Keywords
Citation
Mullineux, A. (2002), "The business cycle in a globalising new economy: Implications for bank regulation and monetary policy", Journal of Financial Regulation and Compliance, Vol. 10 No. 2, pp. 162-167. https://doi.org/10.1108/13581980210810175
Publisher
:MCB UP Ltd
Copyright © 2002, MCB UP Limited