Financial cycle
Financial cycle useful for forecasting recessions – BIS paper
Measures of the financial cycle may be better predictors of recession than standard metrics
Borio and co-authors attack concept of natural interest rate
BIS paper sets out a model in which “monetary policy hysteresis” can do lasting damage to the economy
Brazil’s central bank gains powers to license foreign-based banks
Central bank says it will speed up entrance of foreign-owned firms to banking sector
IMF paper tests conventional wisdom on economic and financial cycles
World cycles have not become stronger during globalisation period, researchers find
30 years of central banking
Central banks face credibility tests on a number of fronts
BoE paper: ‘tails’ matter when studying global financial cycle
Authors look to the tails of the distribution to understand exchange rate risk in the global cycle
Mark Carney on joined-up policy-making, forward guidance and Brexit
BoE governor rules out negative rates and change to inflation targets, offers update on too-big-to-fail and use of CCyBs, highlights challenges of an asymmetric monetary system, hits out at cumbersome payments and warns Facebook’s libra cannot ‘learn as…
How Singapore manages its reserves
MAS managing director Ravi Menon explains Singapore’s total approach to reserve management, which includes the use of customised fixed income benchmarks and tapping into external investment expertise
Tighter loan-to-value ratios have stronger impact than a reduction
Other regulations might impact the effectiveness of LTV limits, the authors say
Bank of Italy paper presents new financial stress indicator
New model identifies financial stresses missed by others, authors say
Bank capital ratios fall for first time since 2011
Basel monitoring report finds declines in both risk-weighted capital and leverage ratios
Non-financial firms finance the economy – BIS paper
Authors find non-financial firms act as important intermediators and take on forex risks
BoE publishes revamped FPC communications
New approach follows the style of MPC announcements more closely
IMF paper sets out growth-at-risk framework
Tool for assessing macro-financial conditions likely to enhance surveillance, authors say
BoE’s leveraged loan research draws interest from overseas
UK exposures are modest but firms in US and Japan have bigger holdings of CLOs, which carry echoes of the subprime mortgage crisis
Low rates can encourage risk-taking – BoE paper
Author models the risk-taking channel of monetary policy alongside a “bankruptcy channel”
More trouble likely after ‘bumps’ in past quarter, says BIS’s Borio
Corporate debt markets are looking overstretched and could trigger problems; term spread may not be best indicator of recession, special feature finds
BoE paper outlines DSGE model of financial and real frictions
“Channels of effect” run between financial markets and labour markets, authors find
Brainard reboots calls for countercyclical buffers
“Countercyclical capital requirements build resilience, unlike monetary policy,” Brainard says
Falling offshore borrowing has helped shield Australia – RBA official
RBA’s monetary policy has not followed Fed’s normalisation
Italian crisis and trade tensions are raising eurozone risk – ECB
Emerging market stress and fears of protectionism may drag down global growth, ECB says
Standard notions of time fail to fully explain financial cycles – BIS paper
Distinguishing “calendar time” and “financial cycle time” could help explain booms and busts
Information can substitute for collateral, BoE paper finds
Strong lending relationships can insulate a firm during booms and busts
IMF’s Adrian calls for forecasting upgrade
Policy forecasts should do a better job of capturing endogenous risk, economist says