Debt
Menon: ‘Too early’ to ease macro-prudential policies
Managing director says there are ‘some indications’ the property market is cooling down, but remains concerned by high prices and household debt
IMF paper finds macro-prudential polices can help prevent liquidity traps
Researchers find that debt limits and insurance requirements can help prevent economic agents from accumulating excessive leverage and triggering liquidity traps
New Riksbank data finds household debt higher than previously thought
Study by the central bank puts average debt ratio for households with mortgages at 313%, roughly double the official national average
Danish paper examines effects of household leverage
Over-leveraged households saw the biggest hit to their consumption when the 2008 financial crisis struck, but the relationship broke down as the crisis continued, working paper finds
Riksbank deputy flags danger of leaning against the wind
Karolina Ekholm says use of monetary policy to lean against high indebtedness has created deflation while doing little to solve the debt problems
Cœuré delineates ‘the good the bad and the ugly’ of deleveraging
ECB executive board member says deleveraging is a double-edged sword and stresses the need for central banks to nudge financial institutions towards ‘good’ deleveraging
Home repossession rules explain Europe's divergent debt profiles, paper finds
Discussion paper published by the Deutsche Bundesbank says differences in legal processes explain the ‘striking differences’ in debt profiles of each eurozone country
Argentina lifts capital controls as peso's slide continues
Argentina lifts capital controls a day after central bank quits trying to prop up the currency
Household borrowing not caused by income inequality, Richmond Fed paper argues
Finds low-income households in high-inequality regions accumulated less debt relative to income than their counterparts in lower-inequality regions; rebuts 'wish to keep up' as driver of credit demand
Central Bank of Venezuela seen in debt reshuffle
The central bank will reportedly buy securities from the country's mining corporation with debt accumulated from the state-owned oil company
Riksbank board grappling with ‘genuine policy dilemma'
Minutes show last month's cut in interest rate was preceded by considerable apprehension, with one board member describing it as his ‘most difficult' decision to date at the central bank
Riksbank cuts rates on falling inflation, leaning less against the wind
Swedish central bank cuts interest rates by 25bp to 0.75% to counter falling inflation; household debt levels still a risk, says Ingves, but calls on ‘others' to do more to keep them in check
Sveriges Riksbank calls for higher risk weights on mortgages
Central bank's latest financial stability report supports regulatory proposal to raise minimum amount of capital banks must back up housing loans with from 15 to 25%
Eurozone household debt varies based on institutions, paper finds
Repossession periods are the strongest single determinant of the distribution of secured debt in different member states of the eurozone, with fewer borrowers where repossession periods are longer
Leaning against the wind does more harm than good, warns Svensson
Former Riksbank deputy Lars Svensson argues higher interest rates to combat asset bubbles and financial instability have the opposite effect by raising the real debt burden of households
Tax relief for debt finance helps banks and non-banks, IMF paper finds
There is no significant difference in corporate tax bias towards debt finance between banks and non-banks, according to IMF working paper; Size and leverage levels of firms matter
External balance-sheet structure key in explaining the financial crisis
High gross external debt was indicator of subsequent vulnerability, according to BoE paper; finds ‘important interaction' between 'competing ‘savings glut' and ‘banking glut' hypotheses
Swedish policy-makers clash on mortgage risk weights
Heads of Sveriges Riksbank and Swedish Financial Services Authority disagree over where to set the risk-weight floor on mortgages
US fiscal stance is creating inflation, says Riksbank paper
Researchers show the existing unsustainable levels of US federal debt are generating inflationary pressures, but these are difficult to spot as they are being dwarfed by Fed policy and economic slack
MAS targets household debt with new credit rules
The Monetary Authority of Singapore has unveiled an arsenal of new measures to cap individuals' borrowing in an attempt to rein in rising levels of household debt
Unemployment strongest predictor of mortgage default in the US
Atlanta Fed research finds that individual unemployment increases the probability of mortgage default by 5 to 13 percentage points compared with average sample
Boston Fed paper flags need for research into debt dynamics in recovery period
Research into the relationship between debt and consumption to the household level is ‘limited’ and does not ‘directly speak’ to the United States' recent weak performance, says discussion paper
Sweden's Riksbank holds rates, but new deputy dissents
Ingves suggests the possibility of another increase in mortgage risk-weights after they were raised to a minimum of 15% in April; Riksbank estimates consumer price inflation to remain at 1% in 2013
Irish plan for distressed borrowers attracts criticism
Central Bank of Ireland encourages cooperation between lenders of secured and unsecured debt to keep distressed borrowers from bankruptcy; Irish League of Credit Unions denounces scheme