Macro-prudential
NPLs ‘must’ rise during downturns – MAS’s Menon
If NPLs failed to rise during “difficult times”, that would be a sign banks are not doing their job right, MAS chief says
Israeli survey highlights benefits from ‘digital revolution’
“Tremendous changes” in the banking system are likely to benefit households and small businesses, the central bank says, while stability is also improving
Household debt is ‘serious threat’ to Swedish economy - Riksbank
Banking system is also vulnerable, central bank says
BIS’s Coen warns of danger in delays as output floors remain stuck
Long phase-in periods increase risk of “dilution or backtracking”, says BCBS secretary-general; remains vague on timetable for Basel III completion
No Asean pan-regional regulator in near future – panellists
Divergent stages of development, a desire for sovereignty and the limited business case are hampering further integration, speakers say
Poorly designed macro-pru leads to ‘leakages’, says Turkish working paper
Macro-pru should be designed so firms cannot “bypass” regulations implemented during positive global liquidity shocks; generally policies are effective in controlling credit
RBI begins to wield new banking clean-up powers
Central bank puts pressure on banking sector to carry through plans to address non-performing assets; floats idea of supplying its own credit ratings to prevent “rating shopping”
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
Banking flows affected by ‘Anna Karenina principle’ – paper
All healthy credit relationships are alike, but each unhealthy credit relationship is unhealthy in its own way, the study explains
Riksbank researchers flag benefits of major capital boost
Significant increase in the leverage ratio for Swedish banks could bring net social benefits, study finds
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
Kashkari: Fed should not seek to deflate asset bubbles
Spotting bubbles is too difficult and the costs of failure too great, the Minneapolis Fed chief warns, although he concedes raising interest rates remains an emergency option
Croatia’s Vujčić on tackling NPLs and home-host supervision
Croatian National Bank governor Boris Vujčić explains why dealing firmly with NPLs via a ‘provisioning clock’ does not choke growth while detailing the benefits of ‘home-host’ dialogues, such as the Vienna Initiative
IMF paper sheds light on solvency and liquidity interactions
Neglecting the “solvency-liquidity nexus” could lead to mistakes in stress-testing models, authors warn
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
Banks mull dedicated IFRS 9 capital buffers
Volatility of loan-loss provisioning from new accounting standard demands additional own-funds protection, say banks
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
Let the market regulate banks – FDIC’s Hoenig
Vice-chairman offers proposal that would take an axe to risk-based capital, stress testing and parts of the Volcker rule
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
Growth of shadow banks led by risky investment vehicles – FSB
Shadow banks continue to gain ground, with those offering liquidity and maturity transformation showing some of the fastest growth
Macro-pru can offer ‘breathing space’ for Australian housing
Apra’s actions “will not address pressures”, but will provide “breathing space” as they should lessen the amplification of house prices, says RBA’s Lowe
Price disparity in housing market a cause for concern, says RBA’s Lowe
Australian house prices rising ‘briskly’ in some sectors, says governor of the Reserve Bank of Australia
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