The general policies of the resistance economy aim to support development, dynamicity, and improvement of resistance economy indexes in order to achieve the 20-year development plan. This is issued through a flexible, opportunistic, and generative approach. The instability of economy can have irreparable consequences, resulting in instable periods in the macro-economy and banking system of the country. This manifests itself through increasing inflation, high bank interest rate, increased inter-banking loan interest, among others. It is evident that the developed and developing economies consider PRUDENTIAL macro-policies. Financial REGULATIONS in banks could be studied at three levels: 1. Regulatory rules concerning the establishment and activities in a country, 2. REGULATIONS enacted by the administrative cabinet, 3. PRUDENTIAL level which investigates the legality of development banks. Considering the different roles, aims, and performances of the development banks from commercial ones, one can suggest that one of the main necessities of these types of banks is to analyze the regulatory rules controlling them. Therefore, this study employs a descriptive-practical method to answer the following two questions: 1. From a theoretical perspective, should development banks be controlled through PRUDENTIAL REGULATIONS? Does Bazel agreement provide a proper framework for the development banks? If so, what are their challenges? The findings indicated that rather than enforcing PRUDENTIAL REGULATIONS, the development banks need to be controlled by the supervisor of the sector in order to achieve their aims. So far as the second question is concerned, after analyzing three Bazel agreements, it was found that the second agreement was more flexible, welcomed by most of the development banks around the world. The results concerning the third Bazel agreement showed that some of the requirements are not problematic for the development banks, such as cash risk treatment,however, some others are concerning.

We consider the optimality of various institutional arrangements for agencies that conduct macro-PRUDENTIAL regulation and monetary policy. When a Central Bank is in charge of price and financial stability, a new time inconsistency problem may arise. Ex-ante, the Central Bank chooses the socially optimal level of inflation. Ex-post, however, the Central Bank chooses inflation above the social optimum to reduce the real value of private debt. This inefficient outcome arises when macro-PRUDENTIAL policies cannot be adjusted as frequently as monetary. Importantly, this result arises even when the Central Bank is politically independent. We then consider the role of political pressures in the spirit of Barro and Gordon (1983). We show that if either the macro-PRUDENTIAL regulator or the Central Bank (or both) are not politically independent, separation of price and financial stability objectives does not deliver the social optimum.

Financial markets are channels for attracting surplus financial resources and allocating them to investment. Macro-PRUDENTIAL policy needs to consider financial cycle in order to assess the state of the financial sector, predict its developments and justify the need for specific policy tools. we examined the effect of macro-PRUDENTIAL policies on financial cycle of Iran's economy Over the period 2008-2018 using Unobserved Components Structural Time Series Model. We explored the effect of macro-PRUDENTIAL policy index and other variables on the financial cycle. The findings of this study, using the Generalized method of moments (GMM) for the time series data, suggested that the macro-PRUDENTIAL policy index has a negative and significant effect on the financial cycle in the Iranian economy. Also, the probability(likelihood) of a banking crisis, the interbank market loan rate and the economic growth index have positive and significant effect on the financial cycle.

Different aspects of competition in stock exchanges have been discussed in the literature from either a positive or normative perspective but this paper seeks to come up with an approach encompassing both positive and normative dimensions of competition in various aspects of stock exchanges’ activities. As far as the positive nature of the securities market and industry is concerned, conflicting trends are emerging. The liberalization of securities markets and the disappearance of technical barriers have dismantled the monopoly of national stock exchanges but led to more consolidation. However, we are also witnessing a destabilizing and fragmenting effect of competition on these markets. Following an analysis of the importance of recognition of the normative/positive dichotomy in approaching competition in financial services, we discuss the centrality of information disclosure in creating competitive and stable financial markets. Disclosure of information, therefore, reinforces both competitive and PRUDENTIAL objectives alike. In further attempt, we discuss the tension between the principles of competition and prudence alongside the conflict between competition objectives and advantages in economies of scope and scale. While arguments in weighing the competition against economies of scope and scale are evenly balanced, the unique characteristics of such markets do not allow the absolute application of competition principles when it comes to PRUDENTIAL concerns.

Utilizing finance conceptual framework, this paper applies a Frontier-Volatility analysis to illuminate regulatory policies effects on volatility under Iranian Banking PRUDENTIAL Framework over the period 2003 to 2015 using the raw database collected, classified and compiled by the Rahavard Novin Co. version 3, Securities and Stock Exchange Organization. Findings portray that volatility is affected by the regulatory policies.Tighter regulatory controls will lead to higher volatility that makes it tough for the central bank to regulate the system for culminating financial stability as well as difficulty of entry for the investors. Regulatory policies’ positive variations will also lead to lower share revenues as well as a decrease in the earning per share (EPS) that will make it volatile and also will heighten the liquidity risk causing volatility as well as lower investment and shared revenues fluctuate the performance. Furthermore, economic growth has been ineffective on volatility in the current period although its effect has been positive and significant in the first lag period. Higher assets circulations cause higher and significant volatility. The debt proportion coefficient is positive and significant as expected that financial institutions gain more through higher leverage leading to higher volatilities in earnings.

In recent years, many countries have experienced boom-bust cycles in credit and asset prices, some of which resulted in severe financial crises. Given that housing prices in both advanced and emerging countries have been heavily influenced by housing credit, the decline in housing prices is similar in both groups of countries. In response to these cycles, authorities in many countries have used macro PRUDENTIAL policies as the frontline of defense against the financial instability risks. Macro PRUDENTIAL measures are, indeed, policy tools that have been used intensively in recent years to target suppliers or applicants of financial services (e. g., households and firms). There is no consensus on the relationship between monetary stability and financial stability and their effects on each other. Some argue that while high-interest rates may control inflation (monetary stability), they are deemed to destroy banks’ balance sheets (financial instability). Another argument is that in the financial instability condition, the contraction monetary policy intensifies the likelihood of instability in the financial institutions. In turn, some believe that the financial policies adopted by monetary institutions, including the central bank, are the leading causes of financial instability. On the other hand, some believe that financial stability preservation is always one of the intrinsic duties of the central bank. In effect, the lack of cooperation between the macro PRUDENTIAL and monetary policy-maker authorities may lead to conflicting policies and, therefore nonoptimal results. Moreover, monetary and macro PRUDENTIAL policies as complements to each other can guarantee monetary and financial stability at the same time. This paper studies the effect of macro PRUDENTIAL policies and the interaction of monetary and macro PRUDENTIAL policies on the credit growth and housing prices using the generalized moment method. To that end, the first macro PRUDENTIAL tools index (including the capital requirements, loan-tovalue ratios, and debt-to-income ratios) are constructed for the advanced and emerging economies over the period 2000 to 2014. Then, an aggregate index was constructed under two scenarios of tightening (contraction) and easing (expansion) actions. In effect, the produced aggregate index showed the state of macro PRUDENTIAL policy in each country. To construct the macro PRUDENTIAL tools, IMF (2011) data used in the study of Lim et al. (2011) and Shim et al. (2013) were considered. Following Eckinsky and Ramsey (2017), this paper used seven macro PRUDENTIAL tools (i. e., loan-tovalue ratios, debt-to-income repayments and other housing sector tools, countercyclical capital requirements, loan-loss provision requirements, consumer loan limits, and credit growth limits), to construct the aggregate indicator for the macro PRUDENTIAL policy and sub-indices for housing and non-housing in the studied countries. The dummy variable was, in turn, used to construct the macro PRUDENTIAL tools. If the macro PRUDENTIAL tool was used or intensified in the desired season, the dummy variable was considered 1, and if the use of the macro PRUDENTIAL tool was reduced, the dummy variable was-1. Otherwise, if no macro PRUDENTIAL tool was used, the value was zero. The aggregate macro PRUDENTIAL policy index for each of the housing and non-housing sectors was considered as the sum of the dummy variables. In addition, by aggregating the dummy variables of the specific tools in each country, the non-housing and housing macro PRUDENTIAL policy indexes were constructed. The aggregate macro PRUDENTIAL index was also obtained from the sum of the housing and nonhousing indexes. The results showed that the macro PRUDENTIAL policy indexes (aggregate-housing) had no significant effect on the housing prices and credit growth. However, the simultaneous adoption of the macro PRUDENTIAL policies and monetary policies inhibited the growth of the credit and, consequently the rise in the housing prices. In turn, a comparison of the coefficients showed that the effect of these tools on the credit growth was greater than the housing price growth. This finding, consistent with the results of other research including Wenden Beach et al. (2012), Kotner and Shim (2012), Brno and Friedrich (2014), Bruno et al. (2017), showed that the effectiveness of macro PRUDENTIAL policies in controlling the credit growth was more than lowering the housing prices. On the other hand, the interaction of monetary policies with the non-housing and housing macro PRUDENTIAL policies produced results which were more effective in controlling the credit and housing prices, respectively. In other words, the macro PRUDENTIAL policies that targeted the housing sector were more effective in controlling the housing prices. However, non-housing macro PRUDENTIAL policies were more effective in reducing the credit growth.

This paper investigates the effects of rule-based PRUDENTIAL policies on the banks competition in the deposit market. Using the imperfect competition structure and focusing on heterogeneous banks, we develop a partial equilibrium model, under which implications of how capital adequacy ratio regulation is implemented either discriminatory between banks (micro) or non-discriminatory and uniformly for all banks (macro) will be analyzed. Among the features that are emphasized in this analytical model is the role of self-regulation of bank capital in building confidence in the banking network in a non-linear manner. This, in a range of capital adequacy ratios, has featured the use of that PRUDENTIAL policy tool as a self-defeating one for the policymaker's goal in curbing the portion of high-risk projects in the targeted bank's assets portfolio. Further, a channel to explain the role of monetary policy in establishing stability or fragility of the banking network is introduced. In particular, the role of investors' degree of risk aversion in motivating banks to set their monitoring efforts has been evaluated.

Trade liberalization is one of the rules of the World Trade Organization. PRUDENTIAL regulation is done for financial stability by countries. There should be a legal framework for the World Trade Organization that liberalizes banking services but does not damage financial stability. Based on an analytical descriptive approach data are gathered from the library. According to the article, the World Trade Organization has tried to balance between the liberalization of banking services and PRUDENTIAL regulation and the trade-off between financial stability and the economy. Likewise, after many years of debate banking services liberalization is accepted as a rule and PRUDENTIAL regulation is an exception.