Mortgage-backed securities (MBS)
Fed’s QE contributed to increased risk-taking by lenders – research
Mortgage real estate investment trusts increased leverage following Fed’s asset purchases
Competitive housing markets fostered risk taking before crisis – IMF research
In areas with higher price volatility institutions lowered lending standards
New York Fed lays out QE unwinding scenarios
Fed’s balance sheet is expected to stabilise between $2.5 trillion and $3.3 trillion
RBNZ seeks liquidity and stability with new mortgage bond standard
New Zealand central bank hopes standard will support market liquidity and improve its own risk position
IMF explores ways to reform US mortgage finance
The research questions whether the US model of homeownership through government-backed fixed rate mortgages is sustainable in an increasingly unequal society
FOMC mulls ‘predictable’ balance sheet wind-down
One FOMC member says a “minimum pace” should be set for the reduction in mortgage-backed securities; committee will inform the public about its future plans for the balance sheet when the time comes
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
Central Bank of Ireland eases burden on first-time buyers
Abolition of LTV caps means first-time buyers are now able to borrow up to 90% of the whole value of a property, the central bank says, while restrictions placed on banks’ loan book are squeezed tighter
Securitisation can dampen business cycles, paper finds
When securities are bought by ‘non-financial agents’ instead of financial intermediaries, they can help dampen rather than amplify cycles, research says
Lane reveals string of transparency initiatives in first speech as Irish governor
Central Bank of Ireland discloses new details on salary structures as governor Lane reveals new minutes, reviews and website
Consultancy and advisory services provider of the year: BlackRock Solutions
A key partner to major central banks engaging in complex asset purchases, asset quality reviews, resolution mechanisms and strategic asset allocations
BIS paper finds close link between MBS and bond yields
Authors find ‘strong empirical evidence’ for feedback between mortgage-backed securities and bond yields, with the effects proving transient and ‘hump-shaped’
Advice can affect clients' mortgage choices, says BIS paper
Banks may ‘steer’ households towards certain mortgage types; distorted information has a stronger affect when prices are not adjusted
BIS paper looks for nuanced story of 2008 bank failures
Failed commercial banks in the US suffered most from their exposure to non-household real-estate borrowers, rather than traditional mortgages or agency MBS, a BIS economist finds
Increases in securitisation may lead to under-pricing of risk, study argues
Increased asset securitisation reduces premia on bonds and equities, Bank of Spain working paper says; decrease in cost of risk may not be related to an actual fall in risk
BoE paper explores link between mortgage debt and consumption
Tighter credit conditions and concern over debt repayments may have led to a 2% drop in aggregate private consumption following the crisis, working paper says
Research draws on lessons from Polish prudential policy
The implementation of loan-to-value (LTV) and debt-to-income (DTI) ratios successfully manages credit risk, but the housing loan portfolio remains a concern
Danish paper explores prevalence of interest-only mortgages
Interest-only loans lead some families ‘to save less and increase their leverage’ assets, which could pose a financial stability risk, research shows
Insurers call for clarity on US agency risk weightings
Capital treatment under Solvency II unclear, say securitisation specialists and insurers
Plosser lays out four principles of sound central banking
Former president publishes a reflective essay in Philadelphia Fed’s annual report for 2014; advocates clear objectives, systematic rules, open communication and stable independence
Bank rules and their impact on inequality
Banking regulation has a profound effect on levels of long-term financial inclusion around the world; US engaged in a failed ‘lottery ticket’ effort by the US to offer housing to the poor.
FOMC's Lacker denounces committee's new normalisation principles
Richmond Fed president says FOMC expectation not to sell MBS as part of balance sheet reduction flies in the face of half-a-century's worth of Fed practice
MBS offer portfolio benefits for some central banks, say CBP panellists
Mortgage-backed securities may offer reserve managers a higher yield and diversification benefits for their foreign currency holdings, according to panellists in a new Central Banking On Air debate
Fed’s Stein highlights benefits of mortgage-backed QE
Jeremy Stein says purchasing mortgage-backed securities provides a greater "kick" for corporate investment than Treasury securities