Debt
Andrew Bailey warns of macro impact from pensions trouble
FCA chief says low interest rates and other factors shaping the pensions market are likely to have knock-on effects on the economy, though the area is not well understood
‘Absolutely urgent’ for Mexico to strengthen fiscal stance – Sánchez
Bank of Mexico deputy governor stresses need for fiscal revamp to bolster the Mexican economy as monetary policy can only carry so much weight
Recessions nearly tripled amount of Italian NPLs, paper argues
Italian bad debt levels would be almost one third of their current levels without the sub-prime and sovereign debt crises, a counterfactual analysis argues
More work needed to make case for GDP-linked bonds – BoE paper
The design of GDP-linked bonds needs to align macroeconomic need with investor demand, according to a paper authored for the G20 summit; clearer guidelines and principles could aid adoption
Borrowers’ characteristics are key to successful mortgage restructuring, paper argues
How mortgage was restructured is less important than distressed borrowers’ own characteristics in determining whether loan is repaid, Bank of Ireland paper says
Fiscal stimulus works even in debt-driven recessions – Cleveland Fed paper
Study uses defence spending to estimate fiscal multiplier, finding it is higher in areas with larger debt burdens, contrary to the fears of some economists
Definitions matter when using DTI ratios – Riksbank paper
How regulators define debt and income can affect the outcome of financial stability analysis and the use of macro-prudential tools, authors say
Data gaps hamper work on emerging market vulnerabilities – BIS paper
Large debt stocks, particularly in foreign currencies, point to vulnerabilities in some emerging markets, but gaps in the data are hampering analysis, BIS economists say
Parliament keeps door open to monetary financing in Ghana
Parliament approves bill that removes government representative from central bank board, but government would still be able to borrow from central bank to finance deficit; IMF to discuss implications
European banks’ structure helps drive dollar-denominated debt issuance – paper
Bank of Spain paper examines the most prolific dollar-denominated debt issuers among European banks, finding issuance is driven by range of factors, including desire to hedge
RBNZ weighs tighter macroprudential policy and wider toolkit
Reserve Bank of New Zealand considers use of debt-to-income ratios to calm housing market, consultation with banks to occur before implementation
Lagarde encouraged Paris Club to broaden membership as South Korea joins
South Korea becomes 21st member of creditor country group; speaking at its 60th anniversary Lagarde stresses the value of expanding further
Asian central banks shift bond funds towards local currency debt
Eleven East Asia-Pacific central banks agree to close fund for buying US dollar debt issued in the region and invest the money in local currency debt instead
DMO will not change course after Brexit vote
Head of the UK Debt Management Office stresses principles of predictability and transparency ahead of gilt auctions next week; market reaction to S&P’s downgrade was “extremely muted”
Sweden’s FI gauges impact of debt-to-income limit
Financial regulator tries to attach values to the growth and stability impact of DTI limits, one potential tool for tackling rising household indebtedness
IMF staff warn BoJ against unconventional monetary policies
Fund staff tell Japan to launch even more fiscal and monetary stimulus, but caution against monetisation of the government's debt
RBA’s Kent considers risks around Chinese debt
Australian assistant governor says high debt increases China’s vulnerability to shocks, but because much of it is domestic, and funded by household sector, authorities have some leeway
Bank of Greece pushes for government reforms and debt relief
Monetary policy report urges government to pass reforms, but criticises creditor's focus on tax increases and 3.5% primary surplus; expects growth to pick up to –0.3% by year-end
Liikanen calls for more macroprudential tools in Finland
Bank of Finland governor says new tools should be provided before there is a need to use them; warns of risks associated with growing debt-to-income ratios alongside weaker long-term growth
Accelerating China's capital market reform and cutting debt risks
Recent events have demonstrated that financing difficulties in the real economy persist. Chu Xiaoming, chairman of Shenwan Hongyuan Securities, looks at how the government can tackle these risks
Debt levels in most advanced and emerging economies are too high, Dombret says
Belief in ‘more finance, more growth’ is ‘sexy’ but ‘a sham’, Bundesbank executive board member argues; debt levels in most economies are ‘too high’
‘Urgent’ measures needed to counteract household debt – Riksbank report
Finansinspektionen needs powers to implement effective macro-prudential policies in order to combat household indebtedness, latest financial stability report says
Researchers propose new measure for US fixed-income market liquidity
Authors say it is the first index to apply financial stress indicator methodologies to both US government and corporate debt securities
Central Bank of Barbados govt financing up 25% last fiscal year
Central bank continues to finance government deficit, despite IMF warnings; expects to still buy government debt, but at "lower levels"