Credit conditions
National Bank of Belgium urges care in use of credit conditions surveys
Analysis shows eurozone’s Bank Lending Survey and Belgium’s Survey on Credit Conditions contain useful information – but ‘crucially’ depend on model specification
Canadian paper proposes new DSGE model for analysing credit shocks
Working paper proposes new model that accounts for the effects of defaults on both households and banks; finds the probability of a company defaulting rises with its leverage ratio
Colombian paper draws policy lessons from credit- and business-cycle links
Researchers find lagged response of growth to the credit cycle, making it challenging for policy-makers to target both financial and real variables with a single instrument
BoE’s Bailey sets out limits to central bank SME support
Andrew Bailey says central bank schemes such as funding for lending are restricted due to the presence of structural market failures
National Bank of Hungary optimistic on SME lending
Hungarian central bank releases latest financial stability report; suggests new funding-for-growth scheme will lead to a recovery in lending this year
BoE statistics indicate gradual lending improvement
Lending targeted by funding for lending scheme continues to creep towards positive figures; large gap between lending to individuals and to businesses
IMF paper uses monetary model to explain term premium
Study says central bank supply of liquidity influences asset prices; argues that this relationship can explain greater proportion of term premium than non-monetary models
BoE’s FPC calls on banks to raise more capital despite drop in lending
Financial Policy Committee says banks must correct a £25 billion shortfall by the end of the year, but should not cut lending; loans to private sector continue downward slide
BoE survey sees signs of easing in UK financial markets
Funding costs fall and investor demand rises ‘significantly’, although total volumes remain roughly flat, Bank of England liabilities survey finds
BoJ researcher finds need for heterogeneous response to credit flows
Working paper shows global common factors account for a ‘quantitatively important’ portion of cross-border credit, but vary between regions; suggests need for tailored policy responses
Vietnam central bank needs clearer mandate not independence
The Vietnamese government should worry less about meeting calls for more legal independence for the State Bank of Vietnam and think more about relieving the central bank from some of its wide-reaching responsibilities, says new Central Banking Journal…
Italian credit guarantee scheme helps firms borrow cheaper for longer
Bank of Italy researchers provide empirical evidence for effectiveness of credit guarantee scheme, which helped firms without increasing debt volumes
BoJ paper finds asymmetric macroprudential growth impacts
Research suggests macroprudential policy is good at cooling the economy but less effective at heating it, while the growth impact differs between tools
Ukrainian deputy director says economy is ‘enjoying’ deflation
Oleksandr Arseniuk says ‘low inflation environment’ – with CPI at -0.2% in January – is benefiting the Ukrainian economy
ECB researchers suggest refinements to macro stress tests
Working paper identifies a number of factors in addition to growth that determine the rate of non-performing loans; authors say this could allow for more accurate stress testing
Unorthodox monetary policy would not suit Hungary, says paper
Research finds that unconventional central bank instruments have successfully eased market conditions in developed countries, but would have little impact in Hungary
BIS paper anatomises global liquidity
Study finds liquidity conditions are shaped by credit supply, credit demand, and monetary policy; financial crisis a product of all three
Canadian study links financial development and income volatility
Working paper finds financial development can dampen the impact of technological shocks on the economy
Bank of Russia warns some banks must enhance capital adequacy
Financial stability review says financial conditions remain ‘quite favourable’, but raises concerns over a downward trend in capital adequacy
Bundesbank paper quantifies ‘considerable’ risk spillovers
Researchers design new methodology for measuring systemic risk and contagion effects, finding spillovers are significant but vary from region to region
Banks rush to repay LTROs at first opportunity
Repayments of the European Central Bank’s long-term refinancing operations exceed many analysts’ expectations, as 278 banks choose to pay back nearly 30% of the total
Dutch paper attempts to fill gaps in European unsecured lending data
Working paper develops algorithm to extract information on unsecured money-market loans from Target2 data, then uses the new data to identify trends in lending
Sri Lankan central bank sounds positive note for 2013
Monetary policy review forecasts moderation in inflation and robust economic growth; committee votes to hold repo rate at 7.5% and reverse repo at 9.5%
IMF research examines ‘borrower effects’ during crisis
Working paper constructs index to assess the contribution of risky borrower portfolios in tightened overall credit conditions during a financial crisis