Credit conditions
BoE launches ‘exploratory’ CCP stress test
Central bank will test credit and liquidity exposures, and will also conduct “reverse stress tests”
Hernández de Cos calls for full Basel III implementation
Basel Committee chair says that financial stability depends on adopting reforms
Bank Indonesia tells banks to provide financing to SMEs
As much as 30% of banks’ loan books will need to be directed to small businesses
Lending rate rigidity weakens eurozone monetary policy – BdF paper
Asymmetric costs in changing bank lending reduce effects of looser policy
Norges Bank given new macro-prudential responsibilities
Government assigns central bank power to set countercyclical capital buffer
Bank dividend suspension proved effective – ECB
Lenders that reduced distributions increased both provisions and lending to the real economy
Israel’s financial risks back to pre-Covid levels – central bank
Banks are well capitalised and housing-related risks are low, report says
BIS paper highlights ‘ripple effect’ of monetary policy
Balance sheets of upstream and downstream firms “salient, yet mostly overlooked”, authors say
ECB stress test highlights importance of credit risk
Mid-sized banks suffer higher capital depletion due to lower income from interest and fees
BoE paper explores impact of machine learning on credit
Benefits of AI-driven screening depend on market characteristics, authors find
Climate risks narrowly concentrated among EU banks, report finds
Only 25 EU banks bear most exposure to physical risks of climate change, ECB-ESRB report says
Dallas Fed: credit conditions improved for most in 2020
Study of Texas finds communities with more immigrants saw fewer benefits
Eurozone ‘high-yield’ firms face bond market squeeze – ECB paper
ECB could loosen conditions for buying bonds for firms hit by pandemic, economist says
Financial sector still a headache for central bank modellers
Macro-financial links are difficult to integrate into key models, with progress since the global financial crisis slow. But some central banks are making breakthroughs
Foreign banks can reduce harm of ‘doom loop’ – ECB paper
Cross-border banks in eurozone countries soften effects of sovereign stress on credit
Macro-pru can alleviate stress – Portuguese paper
Co-ordinated macro-prudential and fiscal policies can alleviate credit contractions, paper finds
Covid-19 support may have created “zombie firms” – BIS economists
Policy-makers should impose tighter lending standards and reform bankruptcy law, analysts argue
Judicial efficiency improves bank credit – Bank of Italy paper
Banks lend more freely and at lower rates in regions with swifter bankruptcy proceedings
RBNZ eases dividend restrictions
Deputy governor says NZ economy has rebounded more strongly than expected
A latent rise in r* could upend monetary policy
A rising natural rate could create serious challenges for policy-makers, write Jorma Schäublin and Philip Turner
IMF calls for ‘urgent efforts’ on non-bank macro-pru tools
Fund warns of trade-off between support now and risks in the future
ECB concerned by Hungary consumer credit plan
Draft law would give Central Bank of Hungary powers to directly issue loans for energy efficiency
Credit line exposures worsened Covid bank stock crash – NBER paper
Authors suggest “contingent leverage” could be included in stress tests
Riksbank renews Covid-19 lending facilities
Riksbank extends $60 billion facility and will penalise banks that do not lend to non-financial firms