BoE’s Haldane considers policy to stem pro-cyclicality of haircuts

andrew-haldane

Minimum collateral regulatory requirements should be among the policy tools up for consideration by the Bank of England's Financial Policy Committee as it builds its macroprudential tool-kit, Andy Haldane, the executive director of financial stability at the Bank of England, said on Monday.

Haldane said haircuts on collateral played an important role in the financial crisis, as they applied to secured financing transactions, amplifying the credit cycle. "Thin haircuts made it cheaper for banks

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