The Effectiveness of Macroprudential Policy in Developing Countries: A Systematic Literature Review of Its Impact on the Stability and Strategic Performance of the Banking Sector

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Authors: Dona Elvia Desi, Adler Haymans Manurung, Nera Marinda Machdar
Cited by: 0

Abstract

Abstract : This study aims to evaluate the effectiveness of macroprudential policies in enhancing stability and strategic performance in the banking sectors of developing countries through a Systematic Literature Review (SLR) approach. The primary focus is to assess the extent to which various policy instruments—such as the Loan-to-Value (LTV) ratio, Countercyclical Capital Buffer (CCyB), and Reserve Requirements (RR)—contribute to mitigating systemic risk, reducing credit procyclicality, and influencing bank profitability and efficiency. Employing the PRISMA framework, the study analyzes 87 empirical studies sourced from Scopus, Web of Science, ProQuest, and EBSCOhost, published between 2010 and 2024. Thematic synthesis and bibliometric analysis using VOSviewer were conducted to synthesize the findings. The results indicate that macroprudential policies are generally effective in strengthening banking sector resilience to external shocks and curbing systemic risk accumulation, although their efficacy is highly contingent upon institutional capacity and policy coordination within individual countries. Furthermore, a trade-off emerges between systemic stability and operational efficiency: stringent macroprudential measures tend to dampen short-term profitability while enhancing long-term resilience. This research contributes to the literature on financial management and strategic banking by comprehensively integrating macroprudential and microprudential dimensions and offering policy recommendations tailored to the institutional and economic contexts of developing economies.

Fields of Study & Subjects

Banking stability regulation efficiency Global Financial Regulation and Crises Islamic Finance and Banking Studies

Publication details

Journal / source
Zenodo (CERN European Organization for Nuclear Research)
Publication date
15 January 2026
Language
EN