Posts tagged 'macro-prudence'

So, you thought London house prices were barmy…

Goldman Sachs has had a look attempts to lean against house price cycles by central banks, in 20 OECD countries from 1990 to 2012, to see what effect they have had.

More on that below, but first a striking chart of post-Great Recession house price trends (from the first quarter of 2009 to now):

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Scenes from an asset-liability mismatch

It’s three years to the day since the UK retail bank Northern Rock suddenly found its access to short-term funding markets frozen — setting the Rock up for collapse one month later, amid a depositor run.

A fit background, then, for considering whether macro-prudential moves to make banks hold more deposits will actually prevent them from seeking short-term, risk-filled funding. Read more

‘Capital requirements increase systemic risk.’ Discuss.

Is this what went wrong with Basel II?

Is this what will go wrong with Basel III? Read more

Macro-prudence, macro-unintended consequences

With a tip of the hat to Simon Johnson, here’s a Harvard paper with a curious take on two hot topics of the financial future: macro-prudence and shadow banks.

Getting the first wrong might create (more) perverse incentives in the second. Read more