Financial crisis
Lower monthly quotas effective at preventing mortgage defaults
60% of US defaults during financial crisis caused by lack of ability to pay, paper finds
Leading asset manager warns policy normalisation ‘may never occur’
Northern Trust believes monetary policy is unlikely to revert to pre-crisis levels; observers say central banks are broadly taking the right approach
IMF report studies country responses to volatile capital flows
Set of case studies emphasises value of macro-prudential policy in resisting credit booms across emerging and advanced economies
Swaziland central bank needs macro-prudential powers – IMF
Fund urges authorities to fast-track reform to give central bank financial stability mandate; reliance on customs union leaves economy vulnerable
BIS’s Restoy warns against ‘supervisory straitjacket’
Rules-based frameworks for banking sector intervention may “unduly constrain” regulators, the head of the Financial Stability Institute says
Bank of Spain was one of toughest pre-crisis regulators, report argues
But counter-cyclical provisions were not high enough to cope with crises, Bank of Spain says
Philadelphia Fed launches new research institute
Research body is tasked with better understanding consumer behaviour, particularly in relation to financial markets
Multiplier of spending cuts bigger than fiscal expansions, paper argues
Impact of austerity is at its peak during recessions, Richmond Federal Reserve paper finds
Fiscal stabilisation spurs growth in low fixed-asset sectors - IMF
Those with difficulty raising external funds benefit most from policy, paper argues
Portuguese bank seeks legal ruling on resolution fund payouts
BCP concerned by contingent obligations in Novo Banco sale; Portuguese government and financial sector have financed the resolution fund since its creation in 2012
St Louis Fed explains Fed’s plans to unwind balance sheet
Fed expected to stop replacing maturing securities to reduce $4.5 trillion balance sheet
New board oversight will not “lower the bar” – Fed’s Powell
The proposed new regulation will not lower the bar for boards or lighten the load of directors, says the Fed governor
Riksbank study explores new stress test models for banks
A new proposal recommends developing models that can foresee multiple challenges and solutions
Customer relationships affect severity of bank runs – research
Swiss experience of the global financial crisis offers natural experiment to test what can exacerbate or mitigate a bank run
Tougher action needed on China debts – research body
Asean research office says corporate debt needs close monitoring, even if immediate crisis is unlikely
Draghi and Yellen issue warnings on regulatory rollback
The two central bankers used their speeches at Jackson Hole to focus on the dangers of abandoning the lessons of 2008
Fed announces Libor alternative
Secured Overnight Financing Rate will measure overnight treasury financing transactions
Svensson launches fresh attack on leaning against the wind
Lars Svensson outlines “simple and transparent framework” he hopes will guide debate, as other papers challenge his results
IMF paper explores sustainability of price rises in Colombia
House prices have increased more than 110% in real terms in major cities, but houses are just 13% overvalued
Sarb expands financial supervision
Deputy governor explains the Sarb’s new financial supervisory structure, and indicates it may affect central bank independence
Fed’s liquidity policies more restrictive than other central banks
NY Fed article compares the Fed’s collateral and liquidity frameworks to other major central banks, finding the US central bank is much more limited in its operations
Book notes: The Limits of the Market, by Paul de Grauwe
De Grauwe has produced a concise analysis into how markets and governments react with one another; but his lack of familiarity with the history of economic thought is surprising
Fed’s Fischer criticises efforts to unwind banking regulation in the US
The economist describes attempts to reduce capital standards as “extremely dangerous and extremely short-sighted”
Banks have never been very ‘boring’ – NY Fed economist
Banks have consistently innovated throughout history, and regulations have struggled to keep up, Nicola Cetorelli writes