Macro-prudential policy
Boston Fed conference lays bare uncertainty over macro-prudential policy
Central bankers raise concerns over theoretical and practical barriers to exercise of macro-prudential policy in the US and the appropriate role for monetary policy
Macro-prudential institutions were designed too hastily, Tucker warns
Group of economists including former BoE deputy warn macro-prudential policies are too poorly understood and were too hastily assembled to be effective, outlining possible enhancements
ECB paper traces roots of falling financial integration
Policy interventions beyond traditional capital controls may have ‘unintended’ impact on financial integration, including some macro-prudential measures based around currency
Riksbank paper takes stock of macro-prudential landscape
A survey of the empirical literature on macro-prudential policy says various tools work best in different contexts; more research is needed on combining macro-prudential and monetary policy
FSB pushes for better tools to tackle high corporate debt
Report to G20 outlines some tools that could be used to tackle high and rising corporate debt, but the design process is still ongoing
Limited case for leaning against the wind, says IMF report
Staff conclude the short-term costs of using higher interest rates to address financial risks exceed the longer-term benefits in most cases, but stress door should ‘remain open’
Research draws on lessons from Polish prudential policy
The implementation of loan-to-value (LTV) and debt-to-income (DTI) ratios successfully manages credit risk, but the housing loan portfolio remains a concern
IMF staff call for greater delegation of macro-prudential powers in Norway
Technical note finds institutional structure has worked to good effect in many ways, but identifies issues around co-ordination across ministry, central bank and FSA
Regulatory regime differences may drive international capital flows, study argues
Financial regulation may need to extend the principle of automatic reciprocity between national jurisdictions, working paper argues
BoE paper offers framework for exploring impact of regulation on interbank lending
Central banks could benefit from studying the impact of regulation on the levels of overnight interbank interest rates
Synthetic financial cycle model allows crisis predictions, paper argues
A model of a synthetic financial cycle performs better than the credit-to-GDP gap in predicting financial crises, a European Central Bank working paper argues
BIS reveals new data output in review
Bank for International Settlements expands data around international banking, government debt and private debt service ratios; launches new bulletin and online exploration tool
Norges Bank memo presents indicator of systemic stress
Staff memo outlines ‘composite indicator of systemic stress’ to help with decision on when to lower the countercyclical capital buffer
Bundesbank's Buch pinpoints importance of impact studies for macro-pru policy
Claudia Buch emphasises the usefulness of impact studies for macro-prudential policy, arguing data is an insufficient stand-alone indicator
Riksbank is working on ‘big data’, says Skingsley
Deputy governor speaks to Central Banking about bringing together experts on big data, the possibility of leaning against the wind, risks in the housing market and more
BIS paper studies impact of Swiss CCB on quality of credit
Working paper finds activation of countercyclical capital buffer affected the composition of mortgage lenders in two key ways
RBNZ deputy defends change in mortgage ‘speed limit'
Concession allowing 5% of new mortgages to exceed LTV ratios will not add fuel to market rally that has seen Auckland house prices rise by 24% in past year, deputy governor says
Leverage is key factor in threat posed by bubbles, study finds
A San Francisco Fed study of 17 bubbles over the past 140 years provides empirical support for the idea that leveraged bubbles have most potential for damage
RBNZ tweaks macro-prudential plans after banks push back
Banks will be subject to more lenient ‘speed limits’ and will have more time to adapt to new macro-prudential rules, after the industry complains
Stress indexes have widely varying signal benefits, Fed paper says
Cleveland’s index gives the best picture of current financial stress conditions, but few indexes have value in predicting future problems, Cleveland Fed study says
Swedish regulators press government for clearer powers
Heads of Riksbank, FSA and National Debt Office call for government to speed up implementation of new legislation on macro-prudential powers, but minister says it could take until next year
FSB offers China advice on tackling shadow banking risks
Peer review team led by BoE’s Jon Cunliffe recommends establishing an inter-agency group to coordinate surveillance, among other measures designed to reduce shadow banking risks
Managing financial stability, monetary systems and the economic order
If policy-makers fail to address the challenges presented by strong feedback loops between the economic and monetary systems, the next crisis could seriously damage faith in market-based economies
Swedish deputy wants macro-pru tools for non-banks
Policy-makers must develop new macro-prudential tools for addressing risk in the non-banking sector, warns Sveriges Riksbank’s Cecilia Skingsley