Macro-prudential
Policy intervention helps economies escape ‘stagnation traps’ – paper
Research published by ECB explains how “pessimistic expectations” can lead to low employment and growth, dampening investment; countercyclical subsidies could be the answer
RBA’s Bullock says central banks are ready to ‘take action’
Old school of thought regarding asset bubbles abandoned following financial crisis; macro-prudential tools are helping policymakers “clean up”
Foreign bank branches show more volatile lending – Norges Bank commentary
Foreign branches may be subject to lower capital requirements, giving them a competitive edge but also making their lending growth more volatile
BIS authors spot structural break in bank financing
Research identifies turning point in how banks fund themselves around 2008, with greater reliance on branches and subsidiaries
RBNZ to rethink capital requirements
Review will reassess country’s approach to Basel III implementation, after Australia decides to bolster its banks’ capital to be “unquestionably strong”
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
Basel capital surcharges are too low – Fed paper
Authors argue current Basel standards are not enough to guard against the failure of a global bank, particularly those reliant on short-term funding
EC: regulators could adapt rules to protect bond liquidity
Official recognises regulatory hit to corporate bond and repo markets, but rejects Mifid delay
Tax cuts affect bank leverage and liabilities – BIS paper
Tax cuts have different effects on different banks, authors find; better-capitalised banks increase their assets, while weaker ones clean up their balance sheets
Booms spill over less than busts – Riksbank paper
Financial booms appear to affect the real economy less than busts, suggesting macro-prudential policies will outperform “leaning against the wind”
RBI’s Acharya says India ‘urgently’ needs asset management company
New deputy governor says stressed assets must not be allowed to “fester”, sketching two possible designs for an asset management company
Kuroda flags need for better network of emergency forex liquidity
Bank of Japan governor warns network of swap lines among major central banks may not be enough as systemic banks reach into a broader set of regions
Basel III has aided system stability, interbank models suggest
Model predicts future crashes will not be total wipeout
Only struggling banks cut lending to raise capital ratio – IMF paper
Study of Eastern Europe says banks' strategy matters when it comes to assessing the impact of Basel III; only banks with low profitability cut lending to meet requirements
Macro-prudential policy must move beyond core banking – BoE’s Brazier
Stressed firms may outwardly be resilient but collectively be “overwhelmed”, says BoE director, calling for collective work to understand “feedback loops”
RBA to ‘pay close attention’ to housing market in 2017 – Lowe
Rent growth remains weak but vacancy rates are not high, RBA governor says; households and banks are currently taking the right approach to the environment
UK’s PRA fines Japanese banking group for withholding information
Two arms of banking giant MUFG fall “significantly short” of regulators’ expectations, resulting in fines totalling £26.8m
Capital account management could prevent ‘commodity curse’, BIS paper shows
Authors suggest options for small open economies dealing with commodity booms; solutions could prevent reductions in welfare and support the tradable sector
Macro-prudential spillovers may grow, paper argues
Bundesbank paper uses IBRN data to analyse cross-border effects of policy
Ingves sees cross-border resolution lessons from Swedish crisis
Crisis in the early 1990s prompted Swedish authorities to take early action on cross-border resolution, the Riksbank governor says
UK financial regulators finalise plans to strengthen enforcement and transparency
PRA and FCA publish measures that will keep financial firms better informed about investigations; new framework will “command public confidence”
Basel capital floors are necessary – Riksbank’s af Jochnick
Internal models have led to doubts over true capital adequacy, Riksbank deputy says, so floors have an important role to play
Global financial safety net hits snag in regional finance
Jeromin Zettelmeyer warns moral hazard problems are now more serious with the rise of regional funds; central bank swap lines could be a partial solution
BIS authors design game of asset managers
Authors model effects of cash hoarding and investor runs, finding that “hoarding is the rule, rather than the exception”, with implications for stress testing