Other publications - 1984 to 2013

Macroprudential policy tools and frameworks - Progress Report to G20

This report responds to the call of G20 Leaders on the FSB, IMF and BIS to do further work on macroprudential policy. It traces the progress in implementing macroprudential policy frameworks along three broad lines: (i) advances in the identification and monitoring of systemic financial risk; (ii) the designation and calibration of instruments for macroprudential purposes; and (iii) building institutional and governance arrangements in the domestic and regional context.

The real effects of debt

Paper by S G Cecchetti, M S Mohanty and F Zampolli prepared for the "Achieving Maximum Long-Run Growth" symposium, sponsored by the Federal Reserve Bank of Kansas City, Jackson Hole, Wyoming, 25-27 August 2011. A revised version, published on 16 September 2011 and including the underlying data (in XLS), is available as BIS Working papers No 352.

by Stephen G Cecchetti, Madhusudan Mohanty and Fabrizio Zampolli

Central bank governance and financial stability

This report contains details of new arrangements in a number of places, set in the context of a wider discussion of relevant governance issues. Such new arrangements usefully illustrate the different institutional solutions that are possible for a complex problem.

Assessing the macroeconomic impact of the transition to stronger capital and liquidity requirements - Final report

This Final Report builds on the Interim Report's findings by simulating the macroeconomic impact of the changes to capital standards that were agreed in September 2010 by the group of Governors and Heads of Supervision (GHOS), which oversees the Basel Committee. Among other reforms, the GHOS proposed a strengthened definition of capital; calibrated requirements for minimum capital ratios and for a new capital conservation buffer; and specified a transition path for the new standards.

Assessing the macroeconomic impact of the transition to stronger capital and liquidity requirements - Interim Report

The Basel Committee on Banking Supervision and the Financial Stability Board set up the Macroeconomic Assessment Group (MAG) to assess the macroeconomic effects of the transition to strengthened capital and liquidity regulations. The MAG comprises economic modelling experts from central banks and other authorities. In its Interim Report, the MAG concludes that, for each percentage point increase in the target capital ratio implemented over a four-year horizon, the level of GDP relative to the baseline path declines by a maximum of about 0.19%. The maximum GDP loss occurs ...

Systemic risk: how to deal with it?

Paper by Mr Jaime Caruana, General Manager of the BIS, 12 February 2010. This paper analyses systemic risk and considers appropriate policies to reduce it. It examines systemic risk as a negative externality in two dimensions: the cross-sectional and the time dimension. Policies to reduce externalities in the cross-sectional dimension seek to limit the damage that can arise from interlinkages and common exposures. Policies to address procyclicality in the time dimension seek to build up ...

by Jaime Caruana

Integrating financial stability: new models for a new challenge

This essay was prepared for the joint BIS-ECB Workshop on "Monetary policy and financial stability", Basel, Switzerland, 10-11 September 2009. In this essay, we begin with a brief review of the pre-crisis consensus that provided the basis for stabilisation policy as it has been conducted since around 1980. Our main conclusion is obvious: we need to build economic models that integrate the financial sector in a serious way, accounting for the role of intermediaries with all of their linkages, both with each other and with the real economy. And, most importantly, these models must ...

by Stephen G Cecchetti, Piti Disyatat and Marion Kohler

Issues in the Governance of Central Banks

This report by the Central Bank Governance Group presents information intended to help decision-makers set up governance arrangements that are most suitable for their own circumstances. The report draws on a large body of information on the design and operation of central banks that the BIS has brought together since it initiated work on central bank governance in the early 1990s.

Asset Prices and Monetary Policy: Four Views

The widespread liberalisation of financial markets in the 1980s has increased the interest of central banks in asset price developments in two ways. First, as the use of intermediate targets has become unreliable in many countries, central banks have sought other indicators to guide policy actions. A natural place to look has been various asset markets. Second, the greater role of asset prices in the monetary transmission mechanism, combined with their sustained volatility, has led to an increased concern that large changes in asset prices might disrupt economic activity and price stability as well as lead to financial fragility. This volume collects the views of several prominent scholars and central bankers on whether and how asset price developments can be incorporated in the design of monetary policy. Related questions are: what asset price ...

Implications for central banks of the development of electronic money

This short report gives a general overview of the key features and the main policy issues that arise for central banks as a result of the development of electronic money, a novel method for making retail payments electronically that is often seen as a close substitute for cash. The report notes that there are a wide range of potential issues but focuses on those which are of particular interest to central banks. These include the security of electronic money schemes, the legal framework, monetary policy and seigniorage, and implications for payment system oversight and bank supervision.