General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
April 10, 2018

The Global Financial Stability Report (GFSR) provides an assessment of the global financial system and markets and addresses the emerging market financing in a global context. GFSR focuses on the current market conditions, highlighting systemic issues that could pose a risk to financial stability, and sustained market access by the emerging market borrowers. The report contains, as special features, analytical chapters or essays on structural or systemic issues relevant to international financial stability.

The April report focuses on credit allocation as a source of financial vulnerability and the role of house price synchronization for financial factors. Chapter 2 of the report takes a comprehensive look at the riskiness of corporate credit allocation—the extent to which riskier firms receive credit relative to less risky firms, its relationship to the size of credit expansions, and its relevance to the financial stability analysis. It constructs four measures of the riskiness of credit allocation across a broad set of advanced and emerging market economies. The riskiness of credit allocation is cyclical at the global and country levels and rises when financial conditions and lending standards are looser. Taking it into account helps better predict full-blown banking crises, financial sector stress, and downside risks to growth at horizons up to three years. Since it is a source of vulnerability and may threaten financial stability, policymakers and supervisors should keep close watch on its evolution. This chapter also finds that a period of credit expansion is less likely to be associated with a riskier credit allocation if macro-prudential policy has been tightened, the banking supervisor is more independent, the government has a smaller footprint in the nonfinancial corporate sector, and minority shareholder protection is greater.

Chapter 3 of the report analyzes whether and how house prices move in tandem across countries and major cities around the world. The chapter finds an increase in house price synchronization, on balance, for 40 advanced and emerging market economies and 44 major cities. Policymakers cannot ignore the possibility that shocks to house prices elsewhere will affect markets at home. House price synchronization may not warrant policy intervention, but the heightened synchronicity can signal a downside tail risk to real economic activity. Macro-prudential policies seem to have some ability to influence local house price developments, even in countries with highly synchronized housing markets, and these measures may also be able to reduce a country’s house price synchronization. Such unintended effects are worth considering when evaluating the trade-offs of implementing macro-prudential and other policies.

 

Related Links

Keywords: International, Banking, Securities, Insurance, GFSR, Financial Stability, IMF

Related Articles
News

BCBS Publishes Results of Survey on Proportionality in Bank Regulation

BCBS published a report presenting the results of a survey conducted on proportionality practices in bank regulation and supervision.

March 19, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: Third Update for March 2019

EBA published answers to seven questions under the Single Rulebook question and answer (Q&A) updates for this week.

March 15, 2019 WebPage Regulatory News
News

OCC Updates Recovery Planning Booklet of the Comptroller's Handbook

OCC updated the Recovery Planning booklet of the Comptroller’s Handbook.

March 15, 2019 WebPage Regulatory News
News

US Agencies Adopt Interim Rule to Facilitate Transfers of Legacy Swaps

US Agencies (FCA, FDIC, FED, FHFA, and OCC) are adopting and inviting comments on an interim final rule.

March 15, 2019 WebPage Regulatory News
News

EBA Publishes Report on Convergence of Supervisory Practices Across EU

EBA published annual report on the convergence of supervisory practices in EU.

March 14, 2019 WebPage Regulatory News
News

CPMI-IOSCO Publish Update to Level 1 Assessment of PFMI Implementation

CPMI and IOSCO jointly updated the Level 1 Assessment Online Tracker on monitoring of the implementation of the Principles for financial market infrastructures (PFMI).

March 14, 2019 WebPage Regulatory News
News

Agustín Carstens of BIS Speaks About New Role of Central Banks

While speaking at the 20th anniversary conference of the Financial Stability Institute (FSI), Agustín Carstens, the General Manager of BIS, highlighted the need for regulatory actions in light of the continued evolution of financial technology.

March 14, 2019 WebPage Regulatory News
News

PRA Publishes Policy Statement on Group Supervision Under Solvency II

PRA published a policy statement (PS9/19) that provides feedback on responses to the consultation paper CP15/18 and the final supervisory statement SS9/15 (Appendix) on group supervision under Solvency II.

March 14, 2019 WebPage Regulatory News
News

ECB Announces Start Date for Euro Short-Term Rate

ECB announced that it will start publishing the euro short-term rate (€STR) as of October 02, 2019, reflecting the trading activity of October 01, 2019.

March 14, 2019 WebPage Regulatory News
News

PRA Proposes to Update the Pillar 2 Capital Framework for Banks

PRA is proposing (CP5/19) to update the Pillar 2 capital framework to reflect continued refinements and developments in setting the PRA buffer (Pillar 2B).

March 13, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2754