Chapter 2 looks at efforts by policymakers to revive weak credit growth, which has been seen by many as a primary reason behind the slow economic recovery. The chapter argues that policies are most effective if they target the constraints that underlie the weakness in credit. But it cautions policymakers to be aware of the fiscal costs and implications for financial stability of credit-supporting policies.
Chapter 3 examines how banking funding structures matter for financial stability and the potential impact of various regulatory reforms. It concludes that careful implementation of reform efforts are important to ensure that financial stability benefits are realised.
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