Credit conditions
Difficult liquidity conditions are here to stay, say Asia conference panellists
Gapping moves in spot markets and higher prices for clients in FX derivatives are here to stay, as banks pull back from market-making in non-core currencies, panellists warn
BIS paper studies impact of Swiss CCB on quality of credit
Working paper finds activation of countercyclical capital buffer affected the composition of mortgage lenders in two key ways
Israel’s bank supervisor looks to split credit card companies from banks
Hedva Ber has revealed plans to boost competition in financial sector, including forcing two of the largest Israeli banks to sell their credit card companies and creating a credit database
BoJ deputy urges thorough analysis of risk weight revisions
Hiroshi Nakaso calls for a cost-benefit analysis of proposed revisions to ‘standardised approach for credit risk’ that some market participants fear could restrict financing for development
Indian central bank targets stronger rate transmission
Reserve Bank of India sees improvements in transmission of policy to money markets, but looks to strengthen credit channel as it transitions to inflation targeting framework
IMF paper explores capital inflows and credit growth
Working paper finds an increase in capital inflows can fuel credit growth, but it depends on their composition; no ‘significant’ connection with foreign direct investment
Equity price growth rate ‘leading indicator’ of bank loans, French paper argues
Comparing two models of domestic credit dynamics to recent French data shows the importance of equity price growth rates, according to a Banque de France working paper
IMF paper finds standard risk metrics perform poorly with low financial depth
Authors find ‘excess credit’ is a better early warning indicator for financial instability than credit-to-GDP where countries have limited financial depth
Bundesbank research tracks changing financial cycle
Discussion paper seeks to establish the ‘empirical regularities’ of the financial cycle using an econometric model, finding the cycle has grown longer and more severe over time
Bundesbank paper identifies two ‘clusters’ of credit cycles
Researchers find there is no common credit cycle among European and US economies, rather two distinct groups emerge with cycles converging within
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
ECB survey shows further recovery in bank credit in Q2
European Central Bank publishes latest bank lending survey, which reveals an increase in the share of banks reporting greater demand for loans to enterprises in the eurozone
Zimbabwean governor says banks more stable
John Mangudya says the banking sector ‘remains safe and sound’ after the Reserve Bank of Zimbabwe moved to address credit risk and liquidity constraints
Irish SME report shows growth in new lending
Report published by Central Bank of Ireland shows annualised gross new lending at highest level since 2011, with the largest share channelled to the agricultural sector
ECB paper finds periphery most affected by credit shortage
Peripheral economies appear to suffer a greater slowdown of productivity than their northern neighbours when facing a squeeze on credit, research published by the ECB finds
Non-financials may be caught by shadow bank rules
Banks warn of 'massive' impact from European Banking Authority proposals, which would limit credit lines
ESRB open to revising macro-prudential intermediate objectives
European Systemic Risk Board sees scope for ‘sharpening’ some of the existing five objectives, while potentially adding others, in review of EU policy
Norway moves policy tools in opposite directions
Norges Bank cuts rates to tackle economic slowdown but government imposes higher countercyclical capital buffer as financial stability indicators show signs of danger
Irish banks have returned to profitability but still need repairs, report finds
Central Bank of Ireland’s macro-financial review notes improvements in the banking sector, but high levels of non-performing loans are holding them back
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
BIS researchers find evidence of macro-pru and monetary policy cancelling out
Study of macro-prudential policy in South-east Asia shows policies work best when used in same direction; paints complicated picture including ‘some evidence’ of spillovers
St. Louis Fed’s Bullard makes case for NGDP target
Working paper questions appropriate monetary policy response at zero lower bound and explores the mechanics of a ‘special upward adjustment’ in the price level on credit market
Deeper markets in WAEMU could boost policy transmission
Research published by the IMF finds the transmission of monetary policy is impeded by ‘shallow’ financial markets in the West African Economic and Monetary Union
Fed’s Mester calls for more work on monetary policy and financial stability nexus
Loretta Mester sets out three priorities for research on the consumer credit markets in the United States at conference in Philadelphia