Credit conditions
BIS economists say investor behaviour key to understanding EM challenges
Hyun Song Shin and Philip Turner consider implications of shift in financial intermediation for emerging markets; part of wider Banque de France review on the subject
PBoC steps up support with reserve ratio cuts
People’s Bank of China cuts the ratio for the second time this year, with observers pointing to pressure on the monetary base from foreign exchange outflows as a motivating factor
Spanish paper finds LTROs had ‘moderate’ effect
Working paper examines the impact of two ‘very long-term refinancing operations’ conducted in 2011 and 2012, finding evidence of a bank lending channel
SMEs benefit from easier European credit standards
Latest ECB bank-lending survey shows credit standards continuing to ease for enterprises in Europe during the first few months of this year; demand for loans widely expected to increase further
Balkanisation of bank lending has made recipient countries safer, says IMF
Analytical chapter from upcoming financial stability report highlights benefits of reduction in certain cross-border credit flows
Fed paper measures damage from capital flow surges
Researchers find surging capital flows push labour away from manufacturing, create sudden booms and recessions, and do more damage if there is a sudden reversal
BIS paper finds macro-prudential impact varies during cycle
Working paper finds evidence tightening policy is more effective than loosening it, and has a greater impact when credit has been expanding quickly
Irish deputy encouraged by NPL progress
Cyril Roux says banks have improved their distressed debt operations but warns it will take several years to work though the stock of commercial NPLs still outstanding
ECB paper emphasises importance of time horizons for early-warning models
Working paper finds the selection of a particular time horizon can have ‘considerable implications’ for the performance of economic variables in predicting bank crises
Third TLTRO sees extra €98 billion borrowed from ECB
Latest allocation of cheap loans pushes total amount borrowed to €310 billion; measures aimed at repairing transmission mechanism and encouraging loans to real economy
BIS charts ‘boundaries of the unthinkable’ as risks rise
Quarterly review flags growing vulnerabilities and signs of credit booms in some economies; research finds limited impact of deflation on growth, pointing to importance of financial sector
IMF paper warns against ‘overburdening’ LatAm central banks
Working paper studies evolution of central banks in Latin America, and warns against jeopardising the credibility they currently enjoy by handing them new mandates
Paper examines role of capital in BHC lending decisions
Authors find an increase in capital requirements of bank holding companies is ‘likely’ to increase the interest rate charged on loans, resulting in a ‘significant’ reduction in lending
BoE agents shift perspective towards shadow banking
Role of central bank agents shifts towards financial stability and brings particular benefits in tracking the rise of non-bank finance, shows BoE quarterly bulletin
ESRB group wants treatment of sovereign debt reviewed
Report published by European Systemic Risk Board argues sovereign debt can no longer treated as risk-free, and outlines different ways the regulatory framework could be adapted
HKMA tightens housing rules as ‘buoyancy’ returns
Norman Chan points to ‘notable increases in prices and transaction volume’ as he unveils changes to the HKMA’s macro-prudential policies
IMF research looks to jumpstart market for Italian NPLs
Nadège Jassaud and Kenneth Kang discuss their strategy for fostering a market for non-performing loans with Central Banking, stressing the need for ‘decisive action’
Research promotes regional approach to financial stability in Asean
IMF working paper says it is ‘equally important’ as regulatory harmonisation; sees potential for vulnerabilities as countries with lower credit-to-GDP ratios catch up with their neighbours
Fed’s Powell sets ‘high bar’ for leaning against credit cycles
Governor Powell says leaning against the cycle through supervisory policy would ‘almost surely interfere’ with traditional function of capital markets
Czech paper examines link between financial variables and macroeconomy
Financial variables ‘particularly relevant’ in explaining Czech macroeconomic developments in the lead-up to and during downturns, researchers find
Research finds IMF lending helps limit future crises
Working paper published by IMF examines impact of lending programmes on developing countries between 1970 and 2010, finding they reduce likelihood of future banking crises
Eurozone banks report further easing in credit standards
The net percentage of banks reporting easier credit standards continues to grow; ECB survey finds banks’ participation in TLTROs is mostly driven by profitability
Poloz warns regulation could stifle credit to SMEs
Bank of Canada governor says new financial regulation likely to reduce the availability of credit to small companies by discouraging financial innovation
BoE paper says loan fair value techniques come with 'health warnings'
Researchers say it is unlikely that any one technique will capture all relevant aspects of valuation across all types of bank loans