Credit aggregates
Stiglitz urges central banks to focus on credit, not interest rates
Emphasis on interest rates ignores more important question of whether credit is getting where it is needed, Nobel economist argues
RBI’s Mundra: pinning down credit-GDP link is tricky
Deputy governor says a host of factors combine to make the link between credit and growth unclear, but the link may reinstate itself as the economy stabilises
RBA’s Lowe: credit not enough to measure financial cycle
Deputy governor says the financial cycle’s “considerable intuitive appeal” needs to be backed up with better research on measuring cycles, with balance sheets likely to play a key role
BIS paper: money growth-inflation link weakens, credit link grows
Authors find money growth is less important in driving price changes, but credit growth is becoming a more critical factor in financial crises
Cross-border banking contraction broadens – BIS statistics
Latest cross-border banking statistics show drop in cross-border claims spread in Q4 2015 from emerging markets to broader regions; China sees particularly large drops in lending
Changing funding patterns cut both ways for emerging markets, central bankers say
Emerging markets are moving towards greater use of capital market funding, but while this could bring benefits for monetary policy, it also throws up a host of stability risks
BIS statistics show sharp contraction in Q2
Cross-border claims fall significantly in advanced economies, led by euro-denominated transactions; credit to emerging markets is up quarter-on-quarter, but down year-on-year
Cœuré warns ‘serious data gaps’ still exist
ECB executive board member says serious gaps, inconsistencies and inefficiencies still exist in many areas important for monetary policy and financial supervision
IMF paper: capital inflows work differently on credit for households and firms
The composition of capital inflows affects whether and how they cause credit growth, IMF working paper says
BIS statistics show divergent outlook for credit flows
Contraction in cross-border claims on emerging markets more than offset by growing flows to developed economies, although there are considerable disparities between countries and regions
EBA recommends balance between filling resolution fund and procyclicality
European Commission could allow some variation in banks’ contributions to Single Resolution Fund to avoid procyclicality, but reaching the fund’s target level is ‘first priority’
BIS research posits test for unsustainable credit growth
Authors link long-run credit growth with leverage and debt service ratio, proposing a model they claim would have helped predict the 2008 financial crisis three years before it struck
Fed’s Claessens challenges banking Balkanisation theories
Theories emphasising the collapse in cross-border credit since the financial crisis fail to capture a ‘secular trend’ towards emerging markets, says Fed senior adviser
Central Bank of Brazil takes action to boost credit
Co-operative banks in Brazil to be granted as much as 760 million reais for new loans and allowed to issue bonds, in a move designed boost credit in the country
Fed research deputy director testifies on triparty repo market
Deputy director of the Fed’s research and statistics department outlines efforts made towards reform and oversight of the US triparty repo market
Fed’s Lockhart recommends renewed focus on monetary, credit aggregates
Atlanta Fed president also advocates Taylor-type rule to manage exit
Credit boom overlooked due to silo culture in credit markets
Financial Times journalist says informational barriers between credit specialists and regulators meant credit markets were poorly managed pre-crisis
Follow the money
Monetary aggregates are set for a comeback in central banking, but as indicators of financial instability, not inflation. Claire Jones reports
Interview: Otmar Issing
The architect of the ECB’s monetary policy framework talks to Robert Pringle about his new book and the challenges central bankers face at the moment