Featured Product

    IMF Publishes Global Financial Stability Report in April 2018

    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

    HM Treasury Publishes Policy Statement Amending Benchmarks Regulation

    HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.

    October 21, 2020 WebPage Regulatory News
    News

    PRA Consults on Implementation of Certain Provisions of CRD5 and CRR2

    PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).

    October 20, 2020 WebPage Regulatory News
    News

    US Agencies Finalize Rule to Reduce Impact of Large Bank Failures

    US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).

    October 20, 2020 WebPage Regulatory News
    News

    US Agencies Finalize Rule on Net Stable Funding Ratio Requirements

    US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.

    October 20, 2020 WebPage Regulatory News
    News

    FSB Sets Out Effective Practices for Cyber Incident Recovery

    FSB finalized the toolkit of effective practices to assist financial institutions in their cyber incident response and recovery activities.

    October 19, 2020 WebPage Regulatory News
    News

    ECB Publishes Eleventh Issue of the Macroprudential Bulletin

    ECB published eleventh issue of the Macroprudential Bulletin, which provides insight into the ongoing work of ECB in the field of macro-prudential policy.

    October 19, 2020 WebPage Regulatory News
    News

    HM Treasury Seeks Views on Review of Solvency II Regime for Insurers

    HM Treasury issued a call for evidence seeking views to reform the prudential regulatory regime—also known as Solvency II—of the insurance sector in UK.

    October 19, 2020 WebPage Regulatory News
    News

    ESRB Responds to EC Consultation on Review of Solvency II

    ESRB responded to the EC consultation on review of Solvency II regime.

    October 19, 2020 WebPage Regulatory News
    News

    HM Treasury Consults on Phase II of Future Regulatory Framework Review

    HM Treasury launched a consultation on Phase II of the Future Regulatory Framework Review, with the comment period ending on January 19, 2021.

    October 19, 2020 WebPage Regulatory News
    News

    EC Publishes Work Program for 2021

    EC adopted the work program for 2021.

    October 19, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5991