Asset bubble
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
Colombian paper extends Bernanke research on asset price bubbles
Paper delivered at the BIS extends Bernanke and Gertler’s result that central banks should not lean against asset bubbles, finding the conclusion still holds in a small open economy
IMF paper tackles puzzle of asset bubbles in efficient markets
Working paper suggests business risk for asset managers creates institutional herding and ‘rational bubble-riding’, with implications for the design of macro-prudential policies
BIS's Hannoun calls failure to normalise policy a 'high-risk strategy'
Deputy general manager flags numerous ways in which unconventional policy may have adverse effects on the economy, both now and in the future
Netherlands Bank flags risk from ECB asset purchases
Markets are positive about the ECB's efforts to ease monetary policy, but unconventional measures carry the risk of pumping up asset bubbles, Dutch financial stability review warns
Colombian economist extends Bernanke-Gertler model for open economies
Model holds for open as well as closed economies, Central Bank of Colombia paper finds, concluding that they are even more vulnerable to asset price bubbles
Poor co-ordination on capital controls could prove ‘highly detrimental’, paper warns
Paper presented at RBA annual conference finds significant spillover effects from US monetary policy and calls for greater co-ordination of attempts to control capital flows
Chicago Fed paper aims to explain asset fluctuations through ‘unified' model
Framework draws on two theories of the role of credit in asset price fluctuations; study is first step in larger project
Riksbank policy-makers differ 'fundamentally' on role of central bank, says deputy governor
Sveriges Riksbank deputy says policy approach is marginally beneficial at best and risks undermining 'public confidence' in central bank's targeting of inflation
Economics Nobel goes to CBP board member Robert Shiller
Central Banking Publications advisory board member honored for work predicting long-term price trends; Eugene Fama and Lars Peter Hansen share the prize
BoE’s Fisher happy to hold QE ‘in reserve’
Executive director says the ‘dramatic turnaround’ in economic data has alleviated the need for further asset purchases; insists the UK is not in the midst of a housing bubble
ECB paper finds cost of macro-prudential policies may outweigh benefits
Working paper finds macro-prudential policies can be effective in deflating asset bubbles, but warns the cost of doing so may be higher than the benefit
Navigating an exit from accommodative policy is ‘an art and not a science’
Participants at CEPR forum debate the challenges central banks must deal with when withdrawing unconventional policies; some express concern over rising asset prices
Lagarde says QE risks are real, but bubbles are not forming yet
IMF managing director says accommodative policy should remain in place in advanced economies, but clear articulation of an exit strategy will be needed to avoid a repeat of 1994's ‘brutal exit'
RBI’s Subbarao weighs merits of new consensus on capital controls
Duvvuri Subbarao says financial crisis shattered consensus view that capital controls should not be used, but deploying them correctly is still far from straightforward
Fed’s Yellen sees little evidence of stability danger from easy policy
Janet Yellen defends accommodative stance of US monetary policy; says there is no ‘pervasive evidence’ that policies are causing overheating
HKMA report tells investors to brace for volatile financial cycle
Financial stability report says risks from property market volatility have continued to mount; central bank says macro-prudential policy is doing its job but there could be a sudden price reversal
Bank of Japan paper shows popping bubbles may require volatile inflation
Research finds inflation can remain stable while asset price bubbles develop, implying optimal monetary policy should tighten to reduce the bubble at the cost of below-target inflation
Bank of Mauritius chief bemoans ‘glaring absence’ of bank resolution mechanism
Rundheersing Bheenick says lack of efficient resolution mechanism is harming Mauritius’s position as a global financial centre
New paper finds Colombia could be in the midst of a housing bubble
'New-fangled method' of detecting bubbles finds Colombian housing could be in a bubble right now, though findings may not be robust
Nishimura wants change in macro-prudential focus
BoJ deputy governor says financial regulation should work counter-cyclically against demographic expansion to avoid fuelling property bubbles
Bank Indonesia chief says economy strong despite signs of bubbles
Darmin Nasution says Indonesian growth rate ‘one of the highest in the world’, although signs of a property bubble may be emerging
Singapore moves to prevent property price bubble
MAS introduces restrictions on loan tenures and lowers loan-to-value ratios in a bid to stem risk of price bubble in property market
Central Bank of Chile paper tests evidence of asset price booms
Researcher finds evidence that capital flows drive asset price booms; identifies factors that mitigate this effect but says capital controls are not effective