Financial cycle
Bigger housing booms create deeper downturns – IMF paper
Rapid home price rises can trigger big economic busts and misallocations of resources, authors find
Inflation targeting regime needs reform – BIS paper
Authorities should recognise what monetary policy can and cannot do, argues Claudio Borio
‘Financial conditions targeting’ could help stabilise output – paper
“Risk-centric” New Keynesian model highlights benefit of acting on financial conditions
Market-based systemic risk metrics ‘crucial’ for supervisors
Paper finds measures are effective at predicting crises in the US over a long period
One in five main models has endogenous financial sector
Benchmark highlights array of methods central banks use to model financial sector, but 40% still do not model the financial side of the economy
The past and future of BIS economics
The monetary and economic department has become an influential force in central bank economics. Claudio Borio looks back over 37 years at the institution and Hyun Song Shin looks to the future
Hélène Rey on cracking the code to the global financial cycle
The dollar and financial cycle move together. For the first time, economists think they know why
Lessons learned on macro-pru policies
Macro-prudential tools are proving their worth although use cases vary by country; integration into over-arching policy frameworks remains a challenge
Financial Stability Benchmarks 2024 report – seeking sounder banks
Banking regulation remains a work in progress for many central banks, but staffing is a problem
Inequality exacerbates crises in several ways, Fed research finds
High-income households have a high tolerance for risk, which boosts the non-bank sector
Banks’ AI models are flawed – Basel Committee chair
Pablo Hernández de Cos says risk of AI model misspecification is “incredibly high”
‘Brace, brace’: quants say soft landing is unlikely
Investors should prepare for sticky inflation and volatile asset prices as central banks grapple with turning rates cycle
CGFS draws lessons from 168 years of macro-pru policy
Controlling housing market risks can force authorities into difficult political economy terrain
RBI’s Das warns banks to avoid ‘exuberance’ as credit surges
Indian central bank tightens macro-prudential policy on consumer credit
Strong dollar harms EME bond market liquidity – BIS paper
Dealer intermediation vulnerable to both “original sin” and “original sin redux”
Svensson says house price metrics ‘unreliable and misleading’
Former Riksbank deputy governor says authorities are misjudging risks
Claudio Borio on financial cycles, operating frameworks and non-bank reform
The BIS veteran highlights a ‘unique constellation’ of challenges as central banks travel the ‘last mile’ in bringing down inflation – and says there are many more miles to go on non-bank reform
IMF economists build financial stress index for 110 countries
Text-based method allows economists to assess both duration and intensity of financial crises
Macro-pru tools can cut risk of credit bust – IMF paper
Authors explore whether building buffers can increase resilience over the medium term
Fed rate hikes propel ‘crypto cycle’ – IMF paper
Monetary policy more correlated with institutional investment in tech than finance
IMF economist takes on vexed question of macro-pru calibration
Housing markets are “at a turning point”, says Laura Valderrama, and policy faces tough trade-offs