00000nam 2200000zi 4500 9.880178 CaOODSP 20221107165718 m o d f cr cn||||||||| 191004t20192019onca ob f000 0 eng d CaOODSP eng rda CaOODSP eng eng fre FB3-5/2019-43E-PDF Arce, Fernando, author. A macroprudential theory of foreign reserve accumulation / by Fernando Arce, Julien Bengui and Javier Bianchi. Ottawa, Ontario, Canada : Bank of Canada = Banque du Canada, 2019. ©2019 1 online resource (ii, 29 pages) : colour illustrations. text txt rdacontent computer c rdamedia online resource cr rdacarrier Bank of Canada staff working paper, 1701-9397 ; 2019-43 "October 2019." Includes bibliographical references (pages 25-27). "This paper proposes a theory of foreign reserves as macroprudential policy. We study an open-economy model of financial crises in which pecuniary externalities lead to overborrowing, and show that by accumulating international reserves, the government can achieve the constrained-efficient allocation. The optimal reserve accumulation policy leans against the wind and significantly reduces the exposure to financial crises. The theory is consistent with the joint dynamics of private and official capital flows, both over time and in the cross-section, and can quantitatively account for the recent upward trend in international reserves"--Abstract, page ii. Includes abstracts in English and French. gccst Public finance gccst Financial services gccst Risk management gccst Models Bengui, Julien, author. Bianchi, Javier, author. Bank of Canada. Staff working paper (Bank of Canada) 2019-43. (CaOODSP)9.806221 PDF 2.07 MB https://publications.gc.ca/collections/collection_2019/banque-bank-canada/FB3-5-2019-43-eng.pdf