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Macroprudential policy design now considers the role of monetary policy in financial stability. While traditionally regarded as a blunt, if comprehensive, instrument, monetary policy can enhance or dilute the impact of macroprudential regulations. A widening interest in the interaction of the two sets of policy tools leads to an examination of the legal and institutional frameworks for policy coordination. The cross-border role of monetary policy in macroprudential regulation and the international coordination of relevant policies receive relatively little attention despite the vivid lessons from spillovers and imbalances during the Global Financial Crisis. This paper considers the limited efficacy of the International Monetary Fund in policy coordination and urges the Fund to rigorously examine its approach to financial diplomacy. A minilateralist approach to coordination, embodied in several current proposals, offers hopeful ways forward for global macroprudential policy., I. INTRODUCTION II. INTERACTION OF MACROPRUDENTIAL REGULATION AND MONETARY POLICY A. Monetary Policy and Financial Stability. B. Macroprudential Policy's Role and Limitations C. Interaction of Monetary and Macroprudential Policies 1. [...]

This paper studies whether transparency (measured by accuracy and frequency of macroeconomic information released to the public) leads to lower borrowing costs in sovereign bond markets. We analyze the data generated during 1999-2002 when the International Monetary Fund (IMF) instituted new ways for countries to increase their transparency--by publishing the IMF's assessment of their policies and committing to release more accurate data more frequently. The IMF's preexisting internal timetable for country reports introduced exogenous variation when countries were faced with the option to become more transparent. We exploit this time variation and construct instruments to estimate the impact of transparency on bond yields in a way that is free from endogeneity bias. We find that countries experience a statistically significant decline in borrowing costs (11 percent reduction in credit spreads on average) when they choose to become more transparent. The magnitude of the decline is inversely related to the initial level of transparency and the size of the debt market. [JEL F34, G14] IMF Staff Papers (2007) 55, 183-209. doi:10.1057/palgrave.imfsp.9450028; published online 22 January 2008, A growing literature examines the role of institutions in determining countries' economic performance. It has been argued that better institutions lead to more developed financial markets (La Porta and others, [...]