Macroprudential Regulation — The Missing Policy Pillar

Davis, E. Philip; Karim, Dilruba

doi:10.1177/0027950110364098

Cited by 18 publications

(4 citation statements)

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“…There are many changes to regulation currently being discussed, and macroprudential regulation is becoming more popular. Davis and Karim (2010) in this Review discuss some of the recent trends and suggestions. Capital requirements have already been raised, and the quality of capital will be improved as banks have to concentrate on their Tier One pure equity capital base.…”

Section: Regulation and Protectionmentioning

confidence: 99%

Financial Regulation and Commercial Protection: Should Policy Change?

Barrell¹,

Weale²

2010

Natl. Inst. econ. rev.

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When protection is discussed people normally have policies designed to restrict imports in mind. But the way in which the international economy has been affected by toxic financial assets issued in the United States suggests that countries might face problems not only because of the goods and services trade but also because of the financial assets they import. Thus, in discussing the case for protection, we consider first whether there is a case for protection to prevent economies importing some types of financial instrument and, secondly, whether there is a case for more traditional protection as a way of resolving the global imbalances of the world economy. We conclude that financial protection is a sensible way for countries to protect themselves from risky assets if the production and testing of such assets is not regulated internationally.

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Section: Regulation and Protectionmentioning

confidence: 99%

Financial Regulation and Commercial Protection: Should Policy Change?

Barrell¹,

Weale²

2010

Natl. Inst. econ. rev.

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“…The main road to address systemic risk has been, since the 2007-2008 global financial crisis, that of macroprudential regulation, which has become the alternative solution to the inadequate reliance on micro-prudential regulation (Clement, 2010) and on ''unhelpful mainstream macroeconomic models'' (Arnold, Borio, Ellis, & Moshirian, 2012). Originally a ''missing pillar'' of financial regulation (Davis & Karim, 2009), macro-prudential regulation has taken up a key role in the strategy publicly adopted by central banks across countries in recent years.…”

Section: Time Seriesmentioning

confidence: 99%

Systemic risk, macro-prudential regulation and organizational diversity in banking

Butzbach

2016

Policy and Society

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Since the 2007-2008 global banking crisis, systemic risk has become the central target of policy design in banking regulation in many countries. At the same time, a growing attention has been paid to the systemic importance of bank heterogeneity. The need for diversity has even found its way into official policy documents, both at the European and national level. However, most of the new thinking on the regulatory reforms targeting systemic risk has been conducted within the framework of macro-prudential regulation, which may not be adequate to deal with diversity-related causes of systemic risk. This paper aims, therefore, at contributing to the growing literature on the relationship between systemic risk and banking regulation by (i) explicating the links between systemic risk and banking diversity; (ii) discussing the adequacy of macro and micro-prudential policy instruments to address diversityrelated causes of systemic risk in banking; and (iii) laying out a basic framework for diversity-enhancing policies.

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“…However, there is strong support in the wider literature for varying capital requirements on the basis of changing asset prices as well as credit growth, written both before the crisis (Goodhart, 2005) and since (Davis and Karim, 2010). This approach has been taken in Spain and has been credited with lessening the impact of the financial crisis there (Barrell et al , 2009)[2].…”

Section: Crisis Prevention and Valuationsmentioning

confidence: 99%

The basis of valuations for secured commercial property lending in the UK

Crosby

Hughes

2011

Journal of European Real Estate Research

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PurposeIn the context of the financial crash and the commercial property market downturn, the purpose of this paper is to examine the basis of valuation used in the UK commercial property lending process. Post‐crisis there is discussion of countercyclical measures, including the monitoring of asset prices; however there is no consideration of a different approach to property valuation. This paper questions this omission, given the role that valuations play in the bank regulatory process.Design/methodology/approachThe different bases of valuation available to lenders within international valuation standards are identified as market value (MV), mortgage lending value (MLV) and investment value (IV), with MV being the most used in the UK. Using the different bases in the period before the financial crisis, the UK property market is modelled at a national office, retail and industrial/warehouse sector level to determine the performance of each alternative valuation basis within the context of countercyclical pressures on lending.FindingsBoth MLV and IV would have produced lower valuations than MV, although there are some practical issues involved in adopting the different bases for the bank lending.Originality/valueThe use of a different valuation basis could provide lenders with tools for more informed and prudent lending.

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Macroprudential Regulation — The Missing Policy Pillar

Cited by 18 publications

References 50 publications

Financial Regulation and Commercial Protection: Should Policy Change?

Financial Regulation and Commercial Protection: Should Policy Change?

Systemic risk, macro-prudential regulation and organizational diversity in banking

The basis of valuations for secured commercial property lending in the UK

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