Credit conditions
PBoC working to rein in shadow banking risks
Central bank is toughening its regulatory stance and tightening interbank liquidity as shadow banking products proliferate
Seychelles governor underscores the challenges facing SMEs
Abel says they lack funding as well as non-financial support; central bank will work with commercial sector to come up with a strategy for SME lending
NPLs remain an issue, says Serbian governor Tabaković
Corporate sector accounts for 45% of total NPLs, notes governor
Scrap micro-foundations to repair macroeconomics – Steve Keen
Professor says economy should be viewed as a dynamic system with credit playing a crucial role, arguing we should ditch models such as DSGE
Tanzanian central bank slashes discount rate
Central bank cuts discount rate for the first time since 2013, from 16% to 12%; increase in NPLs has discouraged commercial banks from lending
BoE paper isolates loan supply impact of credit crunch
“Rich, tailor-made data set” informs study of how pre-crisis bank lending characteristics may have impacted post-crisis credit supply
Bank of Namibia takes over government-owned commercial bank
Bank of Namibia removes SME Bank’s chief executive after “suspicious investments” in South Africa; all banking services will continue to operate
IMF praises BCEAO’s latest policy actions
Latest round of measures will result in stronger banking sector, mission chief says; rejuvenation of interbank market will help monetary policy effectiveness
IMF paper examines bank lending in Saudi Arabia
Despite low oil prices, credit to the private sector “remained robust”, but an overreliance on banks financing the deficit needs to stop, author says
BoE paper calls for international standards on 'broader co-ordination'
Credit growth in the rest of the world has a large positive effect on the probability of domestic banking crises
BoE’s Cunliffe sheds light on investment issues
One in five firms report constraints on credit access reduced investment, BoE deputy says, while restrictions on internal fund usage have worsened the problem
Staff incentive schemes lead to bad deals for consumers – paper
Colombian paper examines the effect of bank incentive schemes on consumers; transparency index reveals staff often do not disclose information about the price of financial products
Kenya’s monetary policy framework under threat – IMF
New interest rate caps are “constraining” the central bank’s ability to conduct monetary policy while negatively affecting banks’ profitability, but action plan could see them eliminated
Central Bank of Kenya halts reference rate calculation
Rate made redundant by interest cap, Njoroge explains, as banks prepare for the new arrangement; central bank maintains interest rates at 10%
RBI paper unpacks India’s non-performing loan troubles
Authors find bank risk-taking is procyclical and the level of non-performing loans responds to the interest rate environment and the overall growth of the economy
Book notes: Shadow banking in China, by Andrew Sheng and Ng Chow Soon
The authors dispel many myths about shadow banking in China – but may underestimate future risks, writes Michael Taylor
IMF paper offers more granular stress testing framework
IMF applies new stress testing framework to Ecuador’s banking sector; framework offers more efficient surveillance, authors argue
BIS paper identifies spillovers from targeted macro-prudential policies
Applying tools narrowly to a sector may nevertheless affect other sections of the financial system, authors find
BoE unveils database of macro-prudential policies
Researchers attempt to classify the myriad forms of macro-prudential policy, compiling panel data on when policies were tightened and loosened in different countries
BIS paper adds evidence on macro-prudential spillovers
Tighter macro-prudential measures in one country tend to increase international lending, authors find
RBI’s Mundra hopes to boost credit to small businesses
Deputy governor outlines “ABCD” of issues affecting small businesses’ ability to access credit, including better access to information and new forms of collateral
Korea needs right kind of banking competition – quarterly bulletin
Competition can harm welfare if it is focused on gaining market share through a price war, authors say; Korean system may benefit from greater diversity
RBA cuts as housing risks posed by lower rates ‘diminish’
Reserve Bank of Australia cuts by a further 25bp to 1.5%, after annual CPI inflation drops to 1% in June; growth in lending for housing has "slowed a little"
Kenyan central bank concerned by proposed interest rate caps
The central bank warns of “adverse consequences” from a proposed cap on bank rates, including problems for monetary policy transmission; the measure is part of a bill awaiting presidential assent