Financial crisis
Deregulation could lead to further crisis – Lautenschläger
ECB supervisor worried by politicians’ calls for regulatory loosening
Central banks’ liquidity injections may amplify bank runs, paper argues
ESRB paper looks at 2008 US crisis using simple model of bank runs
BIS authors spot structural break in bank financing
Research identifies turning point in how banks fund themselves around 2008, with greater reliance on branches and subsidiaries
Scrap micro-foundations to repair macroeconomics – Steve Keen
Professor says economy should be viewed as a dynamic system with credit playing a crucial role, arguing we should ditch models such as DSGE
BoE paper isolates loan supply impact of credit crunch
“Rich, tailor-made data set” informs study of how pre-crisis bank lending characteristics may have impacted post-crisis credit supply
MAS director calls for firms to promote good governance
As regulations shift towards strengthening culture at firms, there is only so much central banks can do, MAS’ Ngiap says; firms must put customers before profit
Lifetime achievement award: Donald Kohn
Donald Kohn’s objectivity, intelligence, humour, tireless energy and iron determination to get the job done epitomise the role of a dedicated public servant. He serves as an inspiration to others
BoE paper raises risk of ‘bubbly growth traps’
Asset bubbles can direct resources to low-productivity sectors, which could explain the long hangover from recent crises, author says
Economic shocks more likely to spread within EU – new research
Researchers use new model to measure propagation of regional shocks in Europe
BoE unlikely to predict next financial crisis, says MPC member
BoE MPC members grilled by MPs in forecasting models and past errors; Vlieghe says current models are just not good enough
BoE paper calls for international standards on 'broader co-ordination'
Credit growth in the rest of the world has a large positive effect on the probability of domestic banking crises
Ingves sees cross-border resolution lessons from Swedish crisis
Crisis in the early 1990s prompted Swedish authorities to take early action on cross-border resolution, the Riksbank governor says
FSB: ‘no immediate case’ for aligning rehypothecation rules
No pressing need to harmonise rules, but better monitoring of global collateral reuse will give regulators a clearer understanding, FSB says
Book notes: The International Monetary Fund: Distinguishing Reality from Rhetoric, by Graham Bird and Dane Rowlands
The book brings valuable rigour to bear in assessing the work of the IMF, but suffers from a reliance on ageing data in many places, says Jacek Klich
Riksbank early warning indicator signals high risks
New measure of financial fragility performs better than credit gap method, economists say; current readings suggest risks are on a par with 2008
BIS paper finds Fed’s QE had little discernible impact on real economy
Results are still preliminary, authors say, but “cast some doubt” on the effectiveness of US quantitative easing
Book notes: The Man Who Knew: The Life & Times of Alan Greenspan, by Sebastian Mallaby
An extensive account of Greenspan's life and achievements, but would have benefited from a closer analysis of his relationships with comrades at the Fed
Haldane hopeful for ‘rebirth’ of economics
BoE chief economist believes crisis for the profession could lead to a break with past thinking; offers solutions to productivity problems
BoE paper experiments with measuring vulnerabilities
The study finds the US had highest levels of vulnerability in the run-up to the 2008 financial crisis, with Asia and Europe appearing “robust”; the picture has now reversed, authors say
Book notes: Shadow banking in China, by Andrew Sheng and Ng Chow Soon
The authors dispel many myths about shadow banking in China – but may underestimate future risks, writes Michael Taylor
Non-linear shocks create asymmetric policy impacts – paper
Bank of England working paper shows a shock to mortgage spreads has more of an impact on the real economy during periods of recession, with implications for policy
Task force launches climate disclosure recommendations
Mark Carney says better information will allow investors to “back their convictions with their capital”; Mary Schapiro says businesses will take the lead, even if politicians will not
BoE studies effects of capital requirements on balance sheets
After the financial crisis, banks placed more emphasis on asset deleveraging and adjusted their capital management practices
BIS economists model benefits of leaning against the wind
Endogenous model of financial crises points to benefits of using monetary policy to lean against financial imbalances, in contrast to many other studies