Financial cycle
Fed paper questions value of debt as crisis indicator
Asset prices and current account balance more important, author finds
Adrian and Rey: macro-prudential tools needed to resist ‘bad booms’
Economists say monetary policy cannot fully control local conditions; Hélène Rey calls for improved early warning models
Fed’s Brainard notes pro-cyclical challenges to supervision
Fiscal stimulus at a time when the economy is running hot requires vigilance, governor says; stress tests cannot counter all pro-cyclicality in credit
Risky firms can transmit financial cycle – BIS paper
Authors find smaller, younger firms are more likely to tap into global markets during risk-on phases, creating vulnerabilities
Global leverage may be higher than supervisors realise – IMF paper
Standard measures of leverage are too focused on balance sheets, researchers say
Norway maintains countercyclical capital buffer at 2%
Norges Bank advises the government not to reduce the buffer because of high household debt
Interest rate risk could be seed of next crisis – economists
Financial markets may have underestimated the persistence of low rates, and regulations have amplified the threat, say Srichander Ramaswamy and Philip Turner
Global influence on local financial conditions is stable, research finds
Share of financial fluctuations caused by global factors has not markedly risen in last two decades
Davos experts weigh risks of future crisis
High debt levels, a rise in real interest rates and China are on the agenda for the panellists, who believe another financial crisis is inevitable
‘Goldilocks economy’ implies bears may not be far away – Menon
Despite reasons for optimism, “three grumpy bears” may soon return, says MAS chief
Cyclical price analysis needs major improvements – ECB paper
Researchers say DSGE models’ handling of housing prices is subject to errors
Fed paper sets out model of financial panics
Mark Gertler, Nobuhiro Kiyotaki and Andrea Prestipino examine banking panics in a DSGE model
BoE paper lays out ‘financial conditions index’ for UK
Index proves valuable as a summary measure and also as an input to forecasting
Fed hikes have created ‘paradoxical’ easing – BIS
Review draws parallels between current episode and “Greenspan conundrum” of mid-2000s
OECD issues warning as debt peaks
Debt rises in volume and falls in quality in many OECD countries; New York Fed figures show US household debt at new high
More work needed on supply channel of finance – BIS paper
Demand-side links between the financial and real sectors are better understood, say authors
BIS paper surveys financial shocks in Latin America
Authors study the most effective policy response to financial shocks in different countries
A new era for the BIS
As Basel III inches towards closure and a new BIS general manager prepares to move into his post, Jaime Caruana talks to Daniel Hinge about his eight years at the helm
Xi faces macroeconomic dilemma after China’s party congress
The Chinese premier will have to work hard to avoid a 'Minsky moment', says Hui Feng
Yellen defends contentious FSOC decision on AIG
Top regulators narrowly vote to remove AIG’s designation as systemic, exposing sharply contradicting views on the Financial Stability Oversight Committee
Caruana urges rethink of global co-operation
Closer co-operation across economic policymaking could help to dampen the backlash against globalisation, BIS chief says
Paper challenges Rey’s ideas on global financial cycle
Cerutti, Claessens and Rose contest idea that capital flows are mainly the result of common shocks or developments in the US
Piecing together a financial theory of stagnation
Ideas presented at recent BIS annual meetings reveal an emerging framework that explains how the financial system may be dragging down the real economy; Hélène Rey was the latest to contribute
BIS urges policymakers to exploit ‘window of opportunity’
Financial cycles are getting close to turning in many economies and central banks and governments must make sure they are prepared, the BIS warns in its 2017 annual report