Credit conditions
BoE’s Brazier warns lenders of ‘spiral of complacency’
UK lenders may be starting to let standards slip as memories of the crisis fade, Alex Brazier says
Fiscal challenges a worry for Trinidad and Tobago – report
Central bank cites rising debt and failed fiscal consolidations as reasons for ratings downgrade that could make borrowing costs higher on international markets
RBNZ’s Bascand says banks now less reliant on offshore funding
New Zealand banks are attempting to reduce risk and respond to regulatory changes by tightening lending standards and “aggressively” competing for deposits, says RBNZ deputy
EBA study quantifies impact of IFRS 9
Report finds smaller banks are likely to see a heavier capital impact from new accounting rules; Basel Committee paper says a mix of forward- and backward-looking rules may work best
Time to ‘reignite’ SME development, says Zim governor
Mangudya notes importance of SMEs in supporting nation’s economy but acknowledges access to banking sector is currently poor; financial inclusion strategy aims to help
Bank of Israel warns banks are exposed to vehicle finance
Central bank warns exposures are “not negligible” and continue to grow, although they do not yet present a systemic risk
RBI looks to ease credit conditions as inflation projection falls
Rates on hold, but central bank is seeking to give banks more room to lend by easing capital and liquidity requirements; committee fends off possible government meddling
Uncertainty over size of European ‘shadow banks’ – ESRB
Central banks are improving data collection, but many details remain unclear, report says
Sarb should leave monetary policy alone – IMF
South Africa’s current monetary policy stance is bringing inflation under control, fund mission says, advising the central bank to leave government reforms to do the legwork following downgrade
HKMA tightens macro-prudential measures for second time in a week
Hong Kong authority imposes another round of mortgage tightening measures, targeting home buyers with multiple loans and those whose incomes are not derived from the territory
Credit cycle matters for fiscal policy – BIS paper
Phase in financial cycle has “substantial” impact on public finances, authors find; commodities cycle less important but matters for some
HKMA tightens restrictions on bank loans as risks rise
The city’s de facto central bank is trying to contain credit risk among banks as their exposure to housing developers is growing
LTV ratio more effective than DTS in Canada – BIS paper
Paper examines the effect of recent macro-prudential policies targeting the housing market, finding households will borrow more if they can
BIS paper says macro-pru is better when partnered with monetary policy
Macro-pru does not work as well when it acts as a substitute for monetary policy when dampening credit cycles; when deployed as the main instrument, policies prove very successful even in the short term
IMF urges new macro-pru tools for RBNZ to tackle housing market
Debt-to-income tools would complement existing macro-prudential toolkit and help rein in household credit, fund says; RBNZ in pursuit of such powers but decision must come from government
Credit booms make for more severe recessions – BoE paper
Authors find credit growth is a more reliable predictor of the severity of recessions than debt
IMF warns bad political choices could trigger instability
Fund says financial stability has improved, but high risks remain in China, Europe and the US
Thinking on global capital flows is muddled – BIS’s Shin
BIS head of research says policies to guard against excess global liquidity should look at underlying causes, not symptoms such as capital flows; Fed’s Fischer acknowledges policy spillovers
Riksbank cautious on plans for new macro-prudential tools
Central bank broadly welcomes government proposals but takes issue with elements it sees as limiting flexibility
Sarb deputy says political uncertainty will affect policy normalisation
Mminele asks whether central banks will enforce notion of economic slack as forward guidance reaches limits; political uncertainty rocking the policy landscape
Tucker: policymakers should focus on resilience and clarity
Central banks would gain legitimacy if they could better explain their models of systemic crises, and if politicians specified a particular risk tolerance, says former BoE deputy governor Paul Tucker
Bank and capital market financing not created equal – BIS paper
Substituting bank loans for non-bank finance after a shock appears to have a negative impact on the economy, authors find
Third of businesses think investment has been ‘too low’ – BoE survey
Bank of England publishes results of survey of UK firms in latest quarterly bulletin; businesses experienced both real economy and financial “obstacles” to investment
New factors driving EM corporate leverage – RBI paper
Changed macroeconomic backdrop has taken over from firm-specific factors in driving the build-up of corporate leverage in emerging markets, RBI economist finds