Macroprudential policy practices in dual banking countries

Subject. This article discusses the implementation of macroprudential policy in countries with a dual banking system. Objectives. The article aims to determine the appropriateness and assess the effect of using macroprudential regulation tools to influence lending volumes in countries with a dual banking system. Methods. For the study, I used the methods of analysis, systematization, and econometric analysis. Results. Based on the analysis of the practices of foreign regulators in countries with a dual banking system, the article finds that the set of macroprudential policy tools does not differ from the practices of countries with a traditional banking system. The results of the regression analysis indicate a positive effect of macroprudential instruments on the dynamics of the credit cycle, especially structural instruments. Conclusions. As the importance of the Islamic finance segment rises, there comes the necessity to adapt certain regulatory instruments to the specifics of the risk profile of Islamic financial institutions. Maintaining interconnections with the traditional financial system determines the importance of comprehensive vulnerability monitoring and further improvement of the analytical framework of macroprudential policy regulation.