Browsing by Subject "Financial Stability"

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    Endogenizing banking regulation and supervision : a dynamic equilibrium approach
    (2017-08) Karakoyun, Oğuz Kaan
    This thesis presents a modi ed dynamic general equilibrium model by introducing a supervisory and regulatory agent (RS) that is responsible for setting the level of bank regulation and supervision quality ( ) in order to ensure the banking sector's long term pro tability. We solve the model to examine the e ects of on the optimizing agents, which are households, rms and banks. The level of bank regulation and supervision quality a ects households, through the fraction of savings that are deposited in the banking system; rms, through the fraction of performing loans that they get from the banks; and banks, through the degree of law enforcement on the banks. Our model yields a unique equilibrium with the expected outcomes; that is to say, bank regulation and supervision quality a ects the steady state levels of capital and output positively; and a ects the steady state rates of deposit and loan interest negatively. We also examine the comparative statics of the steady state level of capital, the steady state rates of deposit and loan interest with respect to the rest of the model parameters.
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    Is a loan tax optimal in the presence of leaning against the loan wind policy?
    (2013) Çelik, Şiva
    This thesis aims to figure out an optimal combination of monetary policy tools and macroprudential tools in order to maintain both financial stability and price stability. In particular, given that monetary policy authority already considers loan growth in its objective function, it asks whether an additional macroprudential tool, a loan tax, is welfare-improving. For this purpose, it constructs a simple New Keynesian Model with capital and banking sector. By incorporating loan growth in a loss function, monetary policy authority chooses the optimum weights and derives a Taylor-type interest rate rule, which could be also called as leaning against the credit winds. Then, it adds an endogenous tax rule and compares the minimum mean values of loss function. The result of simulations suggest that a tax rule that responses to deviations from steady state value of growth, inflation and loan growth leads lower loss values, thus, the inclusion of tax in the policy rule set is welfareimproving