Debt
‘Urgent’ measures needed to counteract household debt – Riksbank report
Finansinspektionen needs powers to implement effective macro-prudential policies in order to combat household indebtedness, latest financial stability report says
Researchers propose new measure for US fixed-income market liquidity
Authors say it is the first index to apply financial stress indicator methodologies to both US government and corporate debt securities
Central Bank of Barbados govt financing up 25% last fiscal year
Central bank continues to finance government deficit, despite IMF warnings; expects to still buy government debt, but at "lower levels"
Banks’ debt maturity needs extension – but not too much, paper argues
Eurozone banks’ debt securities need slightly longer maturity periods, but extensions envisaged under Basel III may be excessive, a Bank of Italy paper argues
RBI moves to curb concentrated credit risk
Central bank hopes new prudential measures will reduce banks’ “very high” exposures to large corporations and encourage firms to turn to capital markets for funding
Namibian central bank wary of household debt increase
Namibia has higher household debt levels than regional peers, according to some measures, the central bank’s latest financial stability report notes
Bank of Mexico to send government 239 billion pesos on back of reserve gains
Some 70% of surplus to be used to pay off outstanding government debt or reduce new issuance, while the remaining money will be used to support stabilisation fund
Europe set for new Greek clash as Lagarde hits back over leaks
IMF chief has sharp words for the Greek prime minister after staff phone conversation is posted online by Wikileaks; debt relief remains a major sticking point as July repayment looms
Governor sees Chile progressing with macro-prudential framework
Working paper outlines importance of macro-prudential policy in maintaining financial stability; Vergara and Raddatz identify counter-cyclical capital buffer as a possible tool for the future
Stressed governments persuade banks to increase bond buying, paper finds
European governments under fiscal stress persuaded domestic banks to increase their holdings of sovereign debt, a paper from The Netherlands Bank finds
Central banks running out of room amid turbulence, BIS warns
Confidence in central banks is “faltering” as policies prove impotent, while negative rates erode bank profitability and debt levels weigh on global growth
Kaplan to ‘closely monitor’ debt and ageing demographics in line with growth
Dallas Fed president will also look to other major economies throughout 2016 for patterns that may affect growth; the Federal Reserve will need to be patient, he says
Debt deal struck but ‘heated’ discussions await Argentine president in congress
Vulture funds satisfied but Argentine president faces an ‘uphill’ battle getting deal through congress; analysts ultimately expect it to be approved, but see other challenges on the horizon
Book notes: The end of alchemy, by Mervyn King
King’s book on how to fix everything that is wrong with the financial and economic system lays out radical proposals that deserve serious consideration
Mervyn King calls for radical banking reform
Former Bank of England governor wants to curtail banks’ use of maturity transformation, putting the central bank’s lender-of-last-resort role at the heart of his new banking system
Snapshot: IMF reveals staff views on Argentina
IMF releases informal briefings compiled 2013-2015 in absence of Article IV; staff highlighted adverse effects of central bank and banking sector financing of government
Paper looks at macro-prudential impact on mortgage affordability
Working paper assesses how macro-prudential policies influence the share of households that can “access and sustain” a mortgage at different loan-to-value ratios
Hong Kong activity should weather higher rates – paper
Research published by IMF argues consumption and investment will “remain robust”, despite increase in interest rates in tandem with the US
Argentina inches towards repaying debt
Montreux Partners LP and EM Ltd settle; four creditors yet to agree on removing injunction
Book notes: Between debt and the devil, by Adair Turner
Adair Turner offers a lively and well-structured account of his proposals to radically overhaul the financial sector
Book notes: Debtonator, by Andrew McNally
A lucid book questioning society’s bias towards debt and against equity
High debt tends to reduce consumption growth – Norges Bank memo
Research tries to capture diversity of household balance sheets, finding consumption tends to grow more slowly among those with high debt levels
Debt repayment problems have ‘severe consequences’ on consumption, paper finds
Quarterly consumption 30% lower when debt repayment problems arise, research suggests, while recovery after the arrears is smaller than the initial decline
Dudley says US households responding more cautiously to house price growth
New York Fed report finds housing debt has been relatively flat over past few years despite house prices rising steeply over the period; points to higher principal debt repayments