Macroprudential regulation

Climate transition risk in the banking sector: what can prudential regulation do?

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Saturday, February 17, 2024

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Meeting of 13-14 December 2023

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Friday, January 19, 2024

Bank market power, both in the loan and deposit market, has important implications for credit provision and for financial stability.

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Bank market power, both in the loan and deposit market, has important implications for credit provision and for financial stability.
This article discusses these issues through the lens of a simple theoretical framework.

Luis de Guindos: EU banking package

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Monday, June 19, 2023

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NAIC Announces 2023 Regulatory Priorities

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Monday, February 13, 2023

WASHINGTON, Feb. 13, 2023 /PRNewswire/ -- Today, the National Association of Insurance Commissioners (NAIC) announced its strategic priorities for 2023.

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WASHINGTON, Feb. 13, 2023 /PRNewswire/ -- Today, the National Association of Insurance Commissioners (NAIC) announced its strategic priorities for 2023.
Each year, NAIC Members finalize the priorities and discuss potential workplans after assigning committee responsibilities .
"Our plans for 2023 position us well to continue to advance state-based solutions on current challenging issues.
In 2023, the NAIC will further equip consumers by creating a customized search tool to access the license status of insurance producers selling health insurance.

Christine Lagarde: Macroprudential policy in Europe: building resilience in a challenging environment

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Friday, December 16, 2022

[1]

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[1]
When future historians look back on our times, they may well say we lived through an era of permacrisis.
A key message therein was the crucial importance of ensuring the continued resilience of our financial system.
Resilience is key in helping the financial system to deliver on its ultimate goal of supporting the real economy.
[4] In my remarks today, I will explore these two aspects of resilience, and how we can best ensure that they are met across the financial system.
And I have no doubt that if all parties work together, we can master the challenges standing before us.
By identifying and addressing vulnerabilities ahead of time, we can increase the resilience of the financial system, allowing it to withstand rather than amplify shocks.
This applies first and foremost to banks, which remain at the heart of the European Unions financial system.
They should be attentive to credit risk and remain alert to potential flaws in their internal models as the risk environment evolves.
But building resilience cannot stop at banks: non-banks also play an increasing role in the financial system.
In March this year, the ESRB published a blueprint for how to make the EU macroprudential framework fit for the next decade.
That is why macroprudential policy must remain alert to the emergence of new challenges as and when they appear.
(2019), The biology of human resilience: opportunities for enhancing resilience across the life span,
Biological psychiatry, Vol.
Behn, M, Rancoita, E. and Rodriguez dAcri, C. (2020), Macroprudential capital buffers objectives and usability,
Macroprudential Bulletin, ECB, No 11, 19 October.
Lagarde, C. (2022), Monetary policy in a new environment, speech at the European Banking Congress, 18 November.
ESRB (2022), Concept Note on the Review of the EU macroprudential framework for the banking sector, March.

Monetary and macroprudential policies: trade-offs and interactions

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Friday, November 11, 2022

Hence, macroprudential policies should be used appropriately to manage the balance between deeper recessions and longer-term benefits for economic growth.

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Hence, macroprudential policies should be used appropriately to manage the balance between deeper recessions and longer-term benefits for economic growth.
Generally, the instruments of monetary policy and macroprudential policy both operate through the financial system.
For instance, Van der Ghote (2021) argues that (conventional) monetary policy interventions and macroprudential policy interventions can both help to safeguard financial stability.
In this situation, the degree of monetary policy accommodation is key to smooth the negative effects of tighter macroprudential policy (see Chart 3).
Accommodative monetary policy is shown by the black solid line, a constrained monetary policy is shown by the red dashed line.
Macroprudential policy can also have an impact on the transmission of monetary policy.
The interaction of monetary policy and macroprudential policy also affects bank lending, resulting in strong complementarity between the two policies (see Altavilla, Laeven and Peydr, 2020).
The effects of monetary policy easing on bank lending and risk-taking are greater when macroprudential policy is accommodative and are particularly strong for less capitalised banks.
Overall, monetary and macroprudential policies cannot be considered in isolation, as their transmission channels give rise to significant spillovers.
The degree of monetary policy accommodation has an effect on the short-term impact of macroprudential policy and therefore on the macroprudential policy space.
Recent research developed within the ECB Research Task Force on monetary policy, macroprudential policy and financial stability shows that monetary and macroprudential authorities must take account of important trade-offs and interactions when deciding on policy actions.
Substantial progress has been made on developing practical frameworks of analysis to assess the costs and benefits of macroprudential and monetary policy interventions.

Systemic risk and policy interventions: monetary and macroprudential policy

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Friday, November 11, 2022

Note: The chart displays the distribution of output as a share of output in the absence of macroprudential policy measures, i.e.

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Note: The chart displays the distribution of output as a share of output in the absence of macroprudential policy measures, i.e.
The green bars report the distribution in the absence of macroprudential policy measures, while the blue bars depict the same distribution when macroprudential policy measures are used optimally.
But going back to our initial questions, how do macroprudential policies interact with monetary policy?
However, as long as macroprudential policy is effective, most models suggest that monetary policy should stick to its traditional objective of price stability (see Angelini et al.
In principle, therefore, the traditional Tinbergen rule (of having a separate policy [tool/instrument] for each policy target) applies: macroprudential policy can focus on systemic risk whereas monetary policy can focus on keeping inflation stable and on target.
This being the case, there is an argument for monetary policy to play a macroprudential role (e.g.
Although it varies across models, this macroprudential role of monetary policy takes the general form of leaning against the wind to contain systemic risk during the build-up phase and cleaning up by a relative loosening of policy during financial crises to speed up the recovery.
Although the conceptual case for monetary policy to play a macroprudential role seems clear, there is much less consensus on the practical implications.
All in all, the view that emerges is that there are trade-offs associated with the use of monetary policy to contain systemic risk.
A prudential use of monetary policy may help contain systemic risk but doing so may entail sacrificing some price stability.
Should monetary policy to some extent give up on steering inflation in order to reduce systemic risk?

Glancy Prongay & Murray LLP, a Leading Securities Fraud Law Firm, Announces Investigation of Tarena International, Inc. (TEDU) on Behalf of Investors

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Friday, June 25, 2021

Legal, Professional services, Financial markets, ADSS, European Banking Authority, Macroprudential regulation, Security, Finance, Economy

Glancy Prongay & Murray LLP (GPM), a leading national shareholder rights law firm, today announced that it has commenced an investigation on behalf of Tarena International, Inc. (Tarena or the Company) (NASDAQ: TEDU ) investors concerning the Companys possible violations of the federal securities laws.

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Glancy Prongay & Murray LLP (GPM), a leading national shareholder rights law firm, today announced that it has commenced an investigation on behalf of Tarena International, Inc. (Tarena or the Company) (NASDAQ: TEDU ) investors concerning the Companys possible violations of the federal securities laws.
On this news, Tarenas American Depository Shares (ADSs) price fell 1.2%, to close at $5.02 per ADS on May 1, 2019, thereby damaging investors.
On this news, Tarenas ADSs fell 4.8%, to close at $3.73 per ADS on May 20, 2019, thereby damaging investors.
Glancy Prongay & Murray LLP is a premier law firm representing investors and consumers in securities litigation and other complex class action litigation.

Luis de Guindos: Banking union: achievements and challenges

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Friday, March 19, 2021

Economy, Systemic risk, Finance, Money, Business cycle, Bank regulation, Banking union, Economic integration, European Union law, Luis de Guindos, Macroprudential regulation, Deposit insurance

Speech by Luis de Guindos, Vice-President of the ECB, at the High-level conference on “Strengthening the EU’s bank crisis management and deposit insurance framework: for a more resilient and efficient banking union” organised by the European CommissionThe global financial crisis and sovereign debt crisis highlighted the need to make faster progress towards completing EMU.

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Speech by Luis de Guindos, Vice-President of the ECB, at the High-level conference on “Strengthening the EU’s bank crisis management and deposit insurance framework: for a more resilient and efficient banking union” organised by the European Commission

The global financial crisis and sovereign debt crisis highlighted the need to make faster progress towards completing EMU.
The implementation of these two pillars represents a milestone in European integration and a major success for financial stability.
But in terms of completing the banking union we are not there yet.
First, the final pillar: the European Deposit Insurance Scheme (EDIS).
Second, in the field of crisis management, the tools for dealing with the failure of smaller and deposit-funded banks.
And third, the role of macroprudential policy and how it can help us deal with shocks to the financial system.
This is problematic as the level of confidence in the safety of bank deposits may differ across Member States.
So long as deposit insurance remains at the national level, the link between a bank and its home sovereign persists.
But we have not yet seen sufficient political will to implement this third pillar of the banking union.
These differences create an uneven playing field for bank customers and can prevent failing banks from exiting the market smoothly.