Bank of Mexico governor Agustín Carstens warned against relying too heavily on macro-prudential instruments at the European Central Bank Forum in Sintra, Portugal, this week, adding his voice to the growing chorus of policy-makers questioning their efficacy.
Carstens argues that macro-prudential instruments are most effective when capital flows through the banking system, as policy-makers can deploy "more targeted and effective instruments" such as loan-to-value (LTV) or debt-to-income restricti
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