Macro-prudential policy
Foreign exchange based macro-pru policies cut capital inflows – DNB paper
Data from 83 countries shows formal capital controls do not effectively reduce inflows – researchers
ZLB reduces effectiveness of bank capital ratios – ECB paper
Capital ratios become less effective in reducing risky behaviour when rates are near zero – researcher
Macro-pru policies can worsen fiscal crises – Bundesbank paper
Macro-prudential authorities must be aware of their “fiscal footprint”, researcher argues
Capital controls less effective at curbing flows than macro-pru – BIS paper
Capital controls do not have significant impact on volume or composition of flows, authors find
Crisis exposes flaws in US financial stability regime
Former Fed chair Janet Yellen urges Congress to reform US’s financial stability framework, after failure to curb corporate leverage in the lead-up to lockdown
BoE paper lays foundation for ‘system-wide stress test’
Economists develop framework linking banks, investment funds and hedge funds
Fed set to adopt ‘elements’ of price-level targeting
Covid-19 could act as a catalyst for a Janet Yellen-supported Fed move to adopt elements of price-level targeting. But questions remain about the timing of such a move
Book notes: In the combat zone of finance, by Svein Harald Øygard
A fascinating and readable book for those charged with maintaining financial stability and interested in a new perspective on institutional efficiency
RBNZ lifts mortgage lending restrictions for one year
New Zealand's central bank says latest crisis move will not weaken financial resilience
ECB publishes framework for assessing prudential spillovers
Detailed paper aims to help regulators assess cross-border effects of macro-prudential policies
Colombia cuts reserve requirements in extraordinary meeting
Measures permanently inject $2.3 billion in liquidity, says central bank
Transfer season
Trade frictions with the US have caused a mass industrial transfer to China’s neighbours. Zhou Chengjun, IFF Academic Committee member and inspector of the Macro‑prudential Policy Bureau of the People’s Bank of China, says that shouldn’t stop China…
Some thoughts on CBDC operations in China
People’s Bank of China deputy governor Fan Yifei outlines why he favours an indirect approach to introducing a CBDC in China
Covid-19 macro effects could last 40 years – research
Research from University of California says natural rate could take decades to return to normal
ECB asks eurozone banks to stop dividends
Bank of Israel also asks banks to reassess the distribution of dividends
Sarb consults on Covid-19 regulatory easing
Central bank mulls lowering Pillar 2A capital requirements
Swiss central bank launches unlimited refinancing facility
SNB asks federal government to reduce countercyclical buffer to 0%
Bank of Spain paper looks at macro-pru and growth at risk
Financial cycle, time elapsed and type of measure has major impact on effectiveness – researcher
Carney sets out ‘grand unifying theory’ of macro-pru
Loss function for financial stability echoes format of Taylor rule, but requires much more judgement; speech is Carney’s last as BoE governor
Some countries’ macro-pru measures have reduced systemic risk – IMF paper
Denmark and Czech Republic particularly successful in cutting mortgage risk, researchers find
FOMC discusses communication ‘escape clauses’
Fed might need “leeway” to deal with financial instability, some FOMC members say
Global property investors may undermine macro-pru – CGFS
House prices are rising and increasingly synchronised, BIS committee says
Stress test capital buffer ‘on track’ for 2020 testing – Powell
Plans were floated nearly 22 months ago, but Fed yet to offer final rule
DNB to tighten macro-pru over real estate fears
EBA says Dutch central bank fears overheating after house prices in large cities exceed previous peak