Macro-prudential policy
Riksbank cautious on plans for new macro-prudential tools
Central bank broadly welcomes government proposals but takes issue with elements it sees as limiting flexibility
Volatile housing market puts RBA under pressure
Variations in housing growth and prices ramp up risk to financial stability, RBA minutes show; regulator to consider further measures “if needed”
Congress urged to curb Fed’s regulatory powers
House hearing revives the debate on consolidating US regulatory agencies
Sarb deputy says political uncertainty will affect policy normalisation
Mminele asks whether central banks will enforce notion of economic slack as forward guidance reaches limits; political uncertainty rocking the policy landscape
Tucker: policymakers should focus on resilience and clarity
Central banks would gain legitimacy if they could better explain their models of systemic crises, and if politicians specified a particular risk tolerance, says former BoE deputy governor Paul Tucker
Fed authors construct ‘financial stability sentiment’ index
Index derives sentiment from central bank financial stability reports, finding a drop in sentiment tends to precede a “significant deterioration” of financial indicators
EC consults on twin peaks model for supervisory authorities
Document asks stakeholders for suggestions on funding and governance reform
BoE’s PRA should clarify approach to insurance, report says
Report asks Prudential Regulation Authority to review boundaries of “policyholder protection”, warning the regulator not to stray into the FCA’s territory
Carney warns of fading regulatory momentum
“Nascent risks” could threaten progress made so far if lawmakers and regulators give in to “reform fatigue”, the FSB chairman says
PBoC working to rein in shadow banking risks
Central bank is toughening its regulatory stance and tightening interbank liquidity as shadow banking products proliferate
RBA’s Bullock says central banks are ready to ‘take action’
Old school of thought regarding asset bubbles abandoned following financial crisis; macro-prudential tools are helping policymakers “clean up”
People: FSB appoints Kganyago and Chan to committees; Bank of Spain picks new directors-general
Financial Stability Board replaces Menon and Tarullo with South African and HKMA governors; Bank of Spain makes appointments in financial stability and supervision; and more
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
Booms spill over less than busts – Riksbank paper
Financial booms appear to affect the real economy less than busts, suggesting macro-prudential policies will outperform “leaning against the wind”
Fed’s Mester says public should not hold policymakers to ‘unrealistic account’
Monetary policy cannot and should not be used to spur productivity growth, says FOMC member; unwinding of Fed’s mortgage portfolio may help guard it against calls to enter the realm of fiscal policy
RBA’s Ellis: cross-country and micro-factors matter for housing
The assistant governor sees country-specific and micro-factors as important to understanding the diversity of outcomes in the housing market
Macro-prudential policy must move beyond core banking – BoE’s Brazier
Stressed firms may outwardly be resilient but collectively be “overwhelmed”, says BoE director, calling for collective work to understand “feedback loops”
Macro-prudential spillovers may grow, paper argues
Bundesbank paper uses IBRN data to analyse cross-border effects of policy
BIS paper flags importance of “multi-layered” bank networks
Authors go beyond aggregate exposures to reveal “multiplex” interbank networks, which could allow more tailored policymaking
Thai governor calls for rethink of monetary policy frameworks
New structure should systematically acknowledge the negative impact of monetary policy; Santiprabhob recognises macroprudential cannot take all the strain
Central Bank of Philippines to improve surveillance – Tetangco
Philippines has “ample” policy space to respond to risks, governor says, but monetary policy will only be enacted to prevent inflation deviation
Colombian macro-pru measures have been effective, paper shows
Paper analyses the impact of macro-prudential measures on credit supply of banks; both reserve requirement and dynamic provisioning scheme have negative effect on credit growth
FSB: Japan should strengthen financial stability framework
Latest peer review says Japan has work to do in improving the macro-prudential framework and clarifying approach to resolution
Sharper distinction in household vulnerabilities needed – Poloz
Latest financial stability review stresses importance of understanding difference in risk in housing sector; household indebtedness and housing market imbalances are key concerns