Financial cycle
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
Central Bank of Chile sets first counter-cyclical buffer
BCC also warns government could face financing problems
Carstens calls for return to ‘region of stability’
Short-term thinking has led to increasingly painful trade-offs for policy, BIS chief says
Basel Committee chair reflects on CCyB effectiveness
Pablo Hernández de Cos suggests review of counter-cyclical buffer as uses of tool diverge
Dallas Fed warns of global housing ‘slide’
US and German markets are out of touch with fundamentals, authors say
BIS welcomes end to investors’ ‘sanguine attitude’
Optimism over future easing clashed with what central bankers were actually saying
Non-banks tend to cut lending during crises – BIS paper
Evidence from syndicated lending suggests growth of non-banks could exacerbate crises
Rethinking the CCyB
As central banks rush to replenish bank capital reserves, the countercyclical buffer may need some fine-tuning
Markets starting to reflect ‘tenacious’ inflation, says BIS
Swings in markets highlight investors’ struggle to understand outlook, quarterly review says
Fed paper explores information problems in financial panics
Tight liquidity can cause investors’ beliefs to become “systematically divorced from fundamentals”
BoE paper models macro-prudential spillovers
Agent-based model sheds light on how housing market policies affect different groups, authors say
RBA develops new method of modelling financial sector
Approach takes Martin model “beyond the existing macroeconometric frontier”, say researchers
Foreign vulnerabilities can affect domestic growth – BoE paper
Study of ‘GDP-at-risk’ shows financial factors overseas can lead to worse outcomes locally
Inequality can worsen recessions – BIS paper
But authors say there is little evidence that income inequality affects consumption in normal times
Macro-prudential tools can boost long-run growth – BoE paper
Authors develop theoretical framework linking financial frictions to long-run growth
Rising rates could endanger emerging market recovery, IMF warns
“Divergent recovery” likely to create financial stability challenges, report says
A rebuttal of Philip Turner’s criticism of the BIS ‘house view’
Robert Pringle critiques the key findings raised in Philip Turner’s occasional paper, ‘The new monetary policy revolution: advice and dissent’
Kenya’s central bank transfers $45.6m to government
IMF approves pause in fiscal tightening as Kenyan authorities deal with impact of pandemic
Shadow banks play key role in business cycle – BoE paper
Contraction in securitisation can spill into wider credit conditions, researchers say
Sectoral shocks drive non-bank credit cycles – BIS paper
Authors explore interaction of bank and non-bank credit cycles