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Europe > Switzerland

You are looking at 1 - 5 of 5 items for :

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Cover IMF Working Papers
Calibrating Macroprudential Policies in Europe Amid Rising Housing Market Vulnerability
Ms. Laura Valderrama
Housing market developments are in the spotlight in Europe. Over-stretched valuations amid tightening financial conditions and a cost-of-living crisis have increased risks of a sustained downturn and exposed challenging trade-offs for macroprudential policy between ensuring financial system resilience and smoothing the macro-financial cycle. Against this backdrop, this paper provides detailed considerations regarding how to (re)set macroprudential policy tools in response to housing-related systemic risk in Europe, providing design solutions to avoid unintended consequences during a tightening phase, and navigating the trade-offs between managing the build-up of vulnerabilities and the macro-financial cycle in a downturn. It also proposes a novel framework to measure the effectiveness of tools and avoid overlaps by quantifying the risks addressed by different macroprudential instruments. Finally, it introduces a taxonomy allowing to assess a country’s macroprudential stance and whether adjustments to current policy settings are warranted—such as the relaxation of capital-based tools and possibly some borrower-based measures in the event of a more severe downturn.
Keywords:
Housing markets; household vulnerability; income distribution; economic cycle; financial stability; macroprudential policy.; Macroprudential policy; housing market vulnerability; Policy tool; calibrating Macroprudential policies in Europe amide; Macroprudential Policy stance framework; Countercyclical capital buffers; Mortgages; Housing prices; Credit; Europe; Global
Cover IMF Working Papers
Handle with Care: Regulatory Easing in Times of COVID-19
Mr. Fabian Valencia
,
Mr. Richard Varghese
,
Weijia Yao
, and
Juan Yepez
The policy response to the COVID-19 shock included regulatory easing across many jurisdictions to facilitate the flow of credit to the economy and mitigate a further ampli-fication of the shock through tighter financial conditions. Using an intraday event study,this paper examines how stock prices—a key driver in financial conditions—reacted to regulatory easing announcements in a sample of 18 advanced economies and 8 emerging markets. The paper finds that overall, regulatory easing announcements contributed to looser financial conditions, but effects varied across sectors and tools. Financial regulatory easing led to lower valuations for financial sector stocks, and higher valuations for non-financial sector stocks, particularly for industries that are more dependent on bank financing. Furthermore, valuations declined and financial conditions tightened following announcements related to easier bank capital regulation while equity valuation rose and financial conditions loosened after those about liquidity regulation. Effects from non-regulatory financial measures appear to be generally more muted.
Keywords:
Stock prices; policy announcements; financial conditions; capital; liquidity; COVID-19.; WP; liquidity regulation easing; regulation announcement; announcement dummy; equity price; market reaction
Cover IMF Staff Country Reports
Switzerland: Financial Sector Assessment Program; Technical Note-Macrofinancial Analysis and Macroprudential Policy
International Monetary Fund. Monetary and Capital Markets Department
Financial Sector Assessment Program; Technical Note-Macrofinancial Analysis and Macroprudential Policy
Keywords:
ISCR; CR; mortgage loan; financial market; SNB researcher; SNB analysis; risk weight; bank mortgage; banking system; SNB decision; Pension spending; Mortgages; Financial sector stability; Real estate prices; Countercyclical capital buffers; Global
Cover IMF Working Papers
Why Are Canadian Banks More Resilient?
Rocco Huang
and
Mr. Lev Ratnovski
This paper explores factors behind Canadian banks' relative resilience in the ongoing credit turmoil. We identify two main causes: a higher share of depository funding (vs. wholesale funding) in liabilities, and a number of regulatory and structural factors in the Canadian market that reduced banks' incentives to take excessive risks. The robust predictive power of the depository funding ratio is confirmed in a multivariate analysis of the performance of 72 largest commercial banks in OECD countries during the turmoil.
Keywords:
WP; bank; capital; price; funding; Banking Crisis; Financial Stability; Early Warning System; Canada; bank capital regulation; A. bank Fundamentals; capital injection; bank performance; balance sheet liquidity; Canadian bank; Financial statements; Stocks; Liquidity; Capital adequacy requirements; Business enterprises; Australia and New Zealand
Cover IMF Working Papers
Banking Competition and Capital Ratios
Mr. Martin Cihak
and
Mr. Klaus Schaeck
We use data for more than 2,600 European banks to test whether increased competition causes banks to hold higher capital ratios. Employing panel data techniques, and distinguishing between the competitive conduct of small and large banks, we show that banks tend to hold higher capital ratios when operating in a more competitive environment. This result holds when controlling for the degree of concentration in banking systems, inter-industry competition, characteristics of the wider financial system, and the regulatory and institutional environment.
Keywords:
WP; capital adequacy ratio; market share; banking system; asset growth; bank performance; dependent variable; Bank capital ratios; competition; market structure; regulation; i. output; bank capital; bank-year observation; bank ownership structure; bank competition; bank risk; output of bank; banks' capital ratios; bank i.; banking industry; Capital adequacy requirements; Commercial banks; Bank soundness; Loan loss provisions; Europe