Macro-prudential policy
Riksbank is working on ‘big data’, says Skingsley
Deputy governor speaks to Central Banking about bringing together experts on big data, the possibility of leaning against the wind, risks in the housing market and more
BIS paper studies impact of Swiss CCB on quality of credit
Working paper finds activation of countercyclical capital buffer affected the composition of mortgage lenders in two key ways
RBNZ deputy defends change in mortgage ‘speed limit'
Concession allowing 5% of new mortgages to exceed LTV ratios will not add fuel to market rally that has seen Auckland house prices rise by 24% in past year, deputy governor says
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
RBNZ tweaks macro-prudential plans after banks push back
Banks will be subject to more lenient ‘speed limits’ and will have more time to adapt to new macro-prudential rules, after the industry complains
Stress indexes have widely varying signal benefits, Fed paper says
Cleveland’s index gives the best picture of current financial stress conditions, but few indexes have value in predicting future problems, Cleveland Fed study says
Swedish regulators press government for clearer powers
Heads of Riksbank, FSA and National Debt Office call for government to speed up implementation of new legislation on macro-prudential powers, but minister says it could take until next year
FSB offers China advice on tackling shadow banking risks
Peer review team led by BoE’s Jon Cunliffe recommends establishing an inter-agency group to coordinate surveillance, among other measures designed to reduce shadow banking risks
Managing financial stability, monetary systems and the economic order
If policy-makers fail to address the challenges presented by strong feedback loops between the economic and monetary systems, the next crisis could seriously damage faith in market-based economies
Swedish deputy wants macro-pru tools for non-banks
Policy-makers must develop new macro-prudential tools for addressing risk in the non-banking sector, warns Sveriges Riksbank’s Cecilia Skingsley
Tabaković says Serbia’s macro-prudential policy is on a par with developed countries
National Bank of Serbia governor says central bank is keeping up with its developed economy peers during first press conference on financial stability report
BIS paper models optimal response to unconventional shocks
Authors examine how macro-prudential policy ought to respond to news shocks and regime changes in global liquidity, finding ‘significant variation’ in optimal policy reactions to shocks
BoE’s Cunliffe warns of risks to loosening ‘regulatory straitjacket’
Regulators may need to ‘fine-tune’ the complex web of rules established since the crisis, but they should not be fooled into thinking the key to growth lies in light-touch regulation
Bundesbank paper identifies two ‘clusters’ of credit cycles
Researchers find there is no common credit cycle among European and US economies, rather two distinct groups emerge with cycles converging within
EBA report identifies issues stemming from use of macro-prudential tools to date
Survey of European use of macro-prudential tools to date reveals problems of overlaps and double counting, interaction with micro tools and bewildering diversity
RBNZ proposes measures to boost regulatory efficiency
Consultation following ‘regulatory stocktake’ proposes refinements aimed at cutting unnecessary costs resulting from regulatory expansion in past decade
IMF economists release study on LTV and DTI limits in six countries
Working paper studies the implementation and effectiveness of loan-to-value and debt-service-to-income limits in Brazil, Hong Kong, Malaysia, Poland, Romania and South Korea
BoE’s Miles cautions against use of policy rate for financial stability ends
Use of monetary policy to tackle financial stability goals is less efficient than setting higher capital requirements, outgoing MPC member says
Colombian paper paints nuanced picture of bank risk and efficiency link
Researchers find some efficiency gains from better capitalisation, but results differ depending on whether a bank is large or small, domestic or foreign
IMF staff call on US to develop new macro-prudential tools
Assessment says tools that strengthen market resilience to run risks and fire sales in shadow banking sector should be a high priority; staff report recommends 2016 rate hike
Swedish authorities pin down structural factors driving growth in household debt
The rise in home ownership and a favourable tax system are probably contributing to the growth in household indebtedness, report finds, as Riksbank continues to urge action
Constâncio supports guided stress tests of shadow banks
ECB vice-president continues his campaign for new macro-prudential tools that can impact non-bank institutions, highlighting the importance of developing a ‘clearer picture’ of the sector
IMF paper finds leaning against the wind can work, but it is not optimal
Researchers conclude monetary policy can be used to reduce systemic risks if other, more targeted policy options are unavailable, but macro-prudential policy produces better outcomes
ESRB open to revising macro-prudential intermediate objectives
European Systemic Risk Board sees scope for ‘sharpening’ some of the existing five objectives, while potentially adding others, in review of EU policy