September 25, 2023: The session delved into an empirical examination of the nexus between Macro-Prudential Policy Instruments (MPI) and Country-Level Governance Indicators (CGIs) in reducing the systemic vulnerabilities in 68 countries during 2000-2017. Key finding: CGIs, including corruption controls, government effectiveness, regulatory quality, and the rule of law, significantly moderate the MPI-systemic risk relationship.
High CGI scores yield stability benefits, while low scores incur instability costs of macroprudential policy instruments. Conclusion: Effective systemic stability requires institutional development within a country's governance ecosystem. Collaboration among stakeholders is essential.
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