MacroPru😷 Profile picture
Aug 18, 2018 13 tweets 17 min read Twitter logo Read on Twitter
"#Macroprudential policies could be increased to enhance the resilience of the financial system"… in "Financial conditions and GDP growth-at-risk" Adrian, Liang, et al. @BrookingsInst @IMFNews
GaR: "growth at risk" and general equilibrium models with macrofinancial linkages… @BrookingsInst @IMFNews @MacroFinanceSoc Liang, Adrian, et al
"A structural model would be needed to evaluate how #macroprudential policies could be used to affect GaR. In aspiration, #macroprudential policies could aim to tighten financial conditions when conditional expected growth and GaR are relatively high ... "…
"A related important benefit of developing a GaR measure is that #FinancialStability risks can be expressed in a common metric that can be used by all #macroeconomic policymakers. A common #metric can promote greater #coordination" ...… ...
"It [GaR = growth at risk] may also improve greater accountability for #macroprudential policymakers by providing a #metric in terms that are better understood by other policymakers."… @IMFNews @BrookingsInst
"The GaR [growth at #risk] measure ultimately could help in developing #macroprudential policies."… @BrookingsInst @IMFNews
"The GaR measure ... can provide an objective gauge for downside risks to expected growth and thus whether #macroprudential policy interventions are needed ..."… @BrookingsInst @IMFNews
"The GaR measure ... a metric of whether interventions have been successful.

For example, it could be used to help calibrate a countercyclical capital buffer, severity of stress tests, or borrower #LTV or #DTI
ratios ... "… @BrookingsInst @IMFNews
"estimating [with the GaR #metric] the interplay of #financial conditions and the conditional distribution in a continuous fashion has the advantage that it could become more relevant to #policy making on a regular basis"… @IMFNews @BrookingsInst
"Being able to express [with the GaR #metric] #risks arising from the #financial sector in the same terms as used in models for other #macroeconomic #policies will ... foster more effective consultation and #coordination."…
Adrian, Grinbeg, Liang, Malik @IMFNews @BrookingsInst GaR "The Term Structure of Growth-at-Risk" new #metric for #centralbanking #policy and #macroeconomic-#financial coordination "important role of #financial conditions (#FCI) for the modeling"…
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More from @MacroPru

May 4, 2018
"Such carry trades have been a source of support for EM currencies"… @ft ... carry trades… @BIS_org #EmergingMarkets "comprehensive database that combines bond issuance data with firm-level balance sheet data"
"non-financial firms that exploit favourable global financing conditions to issue US dollar bonds and build cash balances are also those whose share price is most vulnerable to local currency depreciation"… #LiabilityDollarisation
Read 26 tweets
Mar 7, 2018
Chopping down loan loss reserves is another form of de-regulation. #SystemicRisk
China’s banking regulator has softened rules requiring lenders to set aside provisions against losses on bad loans, to encourage banks to provide more trustworthy assessments of their health.…
Read 6 tweets

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