Asset prices
Dynamics and volatility of capital flows a concern, says Mexican deputy
Manuel Ramos-Francia says EM policy-makers are concerned not only with the size of capital outflows, but also the dynamics of those flows, at conference hosted by Bank of Mexico
Riksbank steps up debt warnings in stability report
An absence of measures to address high asset prices and rising debt could result in a ‘serious’ shock with ‘great’ consequences for the economy, Swedish central bank warns
Trinidad and Tobago aims to stay a step ahead of the Fed
Jwala Rambarran tells Central Banking the central bank must remain ‘ahead of the curve’ and ensure a ‘strong enough’ rate differential between assets denominated in local and US currency
Asset purchases having ‘sizeable’ impact on prices in eurozone, ECB paper finds
Working paper says ostensibly puzzling result can be explained by low levels of ‘market distress’ weakening some transmission channels but bolstering others
Ireland: Former financial stability chief and ex-governor clash over crisis
John Hurley firmly rejects an accusation from the former financial stability head of the Irish central bank that senior management suppressed research in the lead-up to the crisis
RBNZ governor reiterates further easing ‘seems likely’
Graeme Wheeler says the central bank is ‘conscious’ of the impact low rates can have on housing demand; RBNZ has cut OCR by 75bp since June
RBI deputy urges banks to address asset quality challenges
SS Mundra discusses challenges facing India’s otherwise ‘vibrant’ banking system; asset quality poses challenges to banks and supervisors
DNB sizes up pension fund recovery plans
DNB assessment of recovery plans highlights funds do not intend to cut pensions in order to achieve new regulatory requirements
Australian SWF heads see returns dipping as central banks normalise policy
The chair of the Australian Government Future Fund says easy monetary policy ‘cannot be sustained indefinitely’ and returns are likely to drop in coming years
Household debt had modest impact on US consumption, research finds
Household debt in the US accounted only slightly for the decline in household consumption nationally in the 2000s, research published by ECB finds
Canadian deputy says LTV and DTI limits ‘most effective’ macro-pru tools
Lawrence Schembri examines demand and supply factors underpinning rise in house prices; evaluates macro-prudential tools used in Canada and elsewhere
Stevens says RBA is working to ‘assess and contain’ housing risks
Statement following decision to hold rates notes house prices rising ‘strongly’ in Sydney, although growth is uneven between regions; other assets also buoyed by low rate environment
New Zealand paper calls for clearer financial stability aims
Researchers argue more guidance is needed on how and when macro-prudential policy will be used, pointing to the lack of hierarchy between distortions
ECB paper flags risk of ‘collateral damage’ from financial transaction tax
Working paper finds an increase in transaction costs, such as the financial transaction tax mooted in the EU, could impact the availability of collateral and damage market liquidity
Australian dollar jumps despite RBA rate cut
Australian central bank cuts benchmark interest rate to 2%; governor Stevens says currency depreciation 'necessary' amid falling terms of trade
RBNZ deputy calls for action on housing imbalances
Grant Spencer says changes to tax treatment of housing should be considered, while he identifies apartment development as the best prospect for boosting supply in the short term
Hellwig warns against expanding financial stability mandate too far
Martin Hellwig presents his thoughts on how to strike a balance between the macroeconomic and financial stability objectives of monetary policy
Poloz: volatility not a reflection of central bank credibility
Canadian governor – greater volatility is a ‘natural reaction’ to central banks gearing up to normalise monetary policy; highlights cost of using forward guidance
Curbs on rehypothecation may boost welfare, St Louis Fed paper finds
Researchers find rehypothecation boosts welfare, particularly as inflation rises, but it generally goes too far, implying there are benefits to regulatory intervention
ECB fears ‘abrupt reversal’ of global search for yield
Central bank says an end to the hunt for yield is the main threat to financial stability in the eurozone; Constâncio concerned by impact on investors’ balance sheets
Netherlands Bank flags risk from ECB asset purchases
Markets are positive about the ECB's efforts to ease monetary policy, but unconventional measures carry the risk of pumping up asset bubbles, Dutch financial stability review warns
China’s cooling property market ‘a challenge’ to growth objectives
RBA governor Glenn Stevens sees property market as a challenge to Chinese authorities’ growth objectives; Dallas Fed economists concerned about impact on shadow banking sector
Bundesbank’s Dombret unperturbed by rising house prices
Andreas Dombret says prices are still tied to fundamentals in German economy, though he would be more concerned if lending began to rise alongside house prices
Credit ratings hit prices 'significantly' more in times of crisis, paper finds
Effects of rating actions on market prices not crucial during favourable market conditions but 'very significant' in times of crisis; analysis covers ratings and prices of 16,500 bonds over 12 years