Credit conditions
Bank of Israel aims to boost construction credit with new regulation
Banking supervision department proposes reclassifying credit risk in wake of financial institution’s efforts to insure against it; suggests it would free up $2.6bn of finance
Atlanta Fed paper demonstrates signalling mechanism in mortgage market
Lenders in mortgage market able to reveal quality of loans by delaying trade, authors find; loans sold five months after origination less likely to default
Beyond banking: ESRB wants wider macro-prudential toolkit
European Systemic Risk Board argues for providing policy-makers with macro-prudential instruments extending to all forms of credit; lays out specific short- and long-term actions
Tighter mortgage lending rules proposed in New Zealand
Central bank looks to crack down on investor lending with high loan-to-value ratios, while tightening the rules for most loans to owner-occupiers; new tools also on the table
Bangladesh has more FX reserves than it needs, chief economist says
Biru Paksha Paul says Bangladesh only needs enough reserve to cover six months’ worth of imports, and it has now exceeded that; sees benefits from low fuel prices in recent years
NPLs down overall but progress is uneven – Kuwaiti report
Kuwaiti banks’ non-performing loans fell in aggregate in 2015 though they are on the rise in the household sector; banks well capitalised but asset growth slowing, financial stability report finds
EBA survey: Most European banks did not see Brexit as risk
European banks anticipated increasing most kinds of loan activity, results of an EBA questionnaire show; few bankers saw ‘Brexit’ as a major source of risk
Rajan urges completion of bank cleanup
Outgoing governor argues actions taken to address public sector bank balance sheets must be taken to their “logical conclusion”; encourages government to provide capital injection
Colombia to treat new credit line as ‘insurance’ against extreme shocks
IMF expands agreement with Colombia to $11.5 billion; deputy technical governor highlights role it has to play as economy goes through period of adjustment
Philippines creates financial inclusion steering committee
Central bank will chair the committee, which comprises 12 other government agencies; will follow up on their work creating a national strategy for financial inclusion
RBI approves new method for restructuring stressed loans
Indian banks will be able to split some of their largest stressed loans in two; rules introduced as RBI looks to help banks achieve “clean and fully provisioned bank balance sheets” by March 2017
PBoC deputy Tao says China’s financial system is failing SMEs
China's financial system needs to improve if it is to support crucial supply-side reforms via a particular focus on SME funding; financial institutions must be allowed to fail, says PBoC deputy
PMA aims for better credit allocation with upgraded scoring system
Palestine Monetary Authority rolls out latest version of its credit scoring system; new categories and adjusted variables designed to improve credit allocation
Irish bad bank shifts focus to delivering new property
National Asset Management Agency is shifting its focus to projects aimed at developing commercial and residential property; asset disposals to be reduced in scale as body winds down
No room for complacency despite ratings stability, Sarb’s Myburgh says
South African Reserve Bank to help support credit rating through delivering on price stability and protecting and enhancing financial stability, financial markets head says
IMF approves larger credit line to Mexico
Fund expands flexible credit line arrangement to $88 billion; confident Mexico's policies "will remain strong"
ECB paper presents evidence of risk-taking channel in US
Working paper finds interest rates affect the quality of bank credit in the US; researchers exploit confidential data on banks’ internal ratings of loans
BoE paper evaluates macro-prudential roles of bank capital regulation and monetary policy
Authors find counter-cyclical regulation is more effective than monetary policy in promoting stability in the wake of a credit shock
IMF staff weigh options for tackling Chinese NPLs
Technical note authored by three IMF employees considers how securitising NPLs or converting them to equity might work in the Chinese context; latest CBRC figures show the stock is growing
BoE’s Cunliffe notes ‘gap’ between bank return and investor expectation
Investors should be prepared for lower returns in the coming year, Bank of England deputy says; risks to the housing market show signs of reducing but FPC poised to act if necessary
IMF working paper sees regulation as key driver of decline in foreign lending
Research contends regulatory tightening is behind much of the ‘sluggishness’ in international banking since the crisis; exploits survey data compiled in preparation for GFSR
IMF urges Mauritius to form macro-prudential authority
Central bank would have “prominent” role in new authority; as a first step, IMF staff recommend establishing a technical group featuring representatives from multiple stakeholders
IMF paper explores spillovers from conventional and Islamic finance
Research considers how monetary policy should adapt to the different stages of development of Islamic finance, and its interactions with conventional finance
Flug outlines state of play on Israeli credit information database
Governor says new database established and operated by Bank of Israel will strike a balance between being comprehensive and relevant; key appointments to follow