Pro-cyclicality of capital regulation: is it a problem? How to fix it?

We use a macroeconomic euro area model with a bank sector to study the pro-cyclical effect of the capital regulation, focusing on the extra pro-cyclicality induced by Basel II over Basel I. Our results suggest that this incremental effect is modest. We also find that regulators could offset the extra pro-cyclicality by a countercyclical capital-requirements policy. Our results also suggest that banks may have incentives to accumulate countercyclical capital buffers, making this policy less relevant, but this finding is depends on the type of economic shock posited. We also survey different policy options for dealing with procyclicality and discuss the pros and cons of the measures available.Basel accord, pro-cyclicality

Banking Supervision: Towards an EU Single Rulebook

Belgian Financial Forum -- Banking Supervision: Towards an EU Single Rulebook (Speech by Andrea Enria Chairman, Chairman of the European Banking Authority

Fair value accounting and financial stability

Accounting standard setters are considering the wider use of fair value accounting. This paper focuses on the financial stability implications of a move in the banking sector from the current accounting framework to full fair value accounting. A simulation exercise is performed on how various external shocks affect the balance sheet of an average European bank under the two frameworks. The paper further investigates the impact of the alternative framework on the main balance sheet items, and the interaction with banks’ risk management, supervisory tools and statistical requirements. It also examines how the application of fair value accounting to banks’ trading book has impacted their share price volatility. It is concluded that the introduction of full fair value accounting could have a significant effect in terms of income volatility, procyclicality of bank lending and more generally financial stability. Hence, any move towards this alternative accounting framework should be gradual.accounting, banks, fair value, financial regulation, financial reporting, financial stability, risk management.

Fair value accounting and financial stability

Accounting standard setters are considering the wider use of fair value accounting. This paper focuses on the financial stability implications of a move in the banking sector from the current accounting framework to full fair value accounting. A simulation exercise is performed on how various external shocks affect the balance sheet of an average European bank under the two frameworks. The paper further investigates the impact of the alternative framework on the main balance sheet items, and the interaction with banks’ risk management, supervisory tools and statistical requirements. It also examines how the application of fair value accounting to banks’ trading book has impacted their share price volatility. It is concluded that the introduction of full fair value accounting could have a significant effect in terms of income volatility, procyclicality of bank lending and more generally financial stability. Hence, any move towards this alternative accounting framework should be gradual

Estudio cualicuantitativo de las variables sociales que definen escenarios de transmisión de la fiebre hemorrágica argentina en las provincias de Buenos Aires y Santa Fe, 2001-2010

The aim of this paper was to characterize transmission scenarios of Argentine Hemorrhagic Fever in the post-vaccination period (2001-2010). The study was made up of three phases. The first consisted of a quantitative analysis using the database of the Dr. Julio I. Maiztegui National Institute of Human Viral Diseases [Instituto Nacional de Enfermedades Virales Humanas] regarding the confirmed cases in the period of study (221 cases). Taking into account the transmission site and the known endemic area, cases were grouped into three hypothetical transmission scenarios, identified as: a) classical, b) emerging-reemerging, c) traveling. In the second phase, in order to test these hypotheses, in-depth interviews were carried out from August to September 2011 within an intentionally selected sample of patients distributed proportionally among the three hypotheses. Finally, in the third stage, the data obtained for each hypothetical scenario were grouped into three spatiotemporal scales: the microscale (subject), the mesoscale (locality) and macroscale (region). The results show that new transmission sites are associated with the social dynamics of cereal production and port-bound routes.El objetivo de este artículo es caracterizar los escenarios de transmisión de fiebre hemorrágica argentina (FHA) en el período de vacunación (2001-2010). El estudio constó de tres etapas. En la primera, se realizó un análisis cuantitativo de la base de datos del Instituto Nacional de Enfermedades Virales Humanas "Dr. Julio I. Maiztegui" (INEVH) de casos de FHA confirmados en el período (221 casos) que, sobre la base del lugar de transmisión y la zona endémica conocida, se agruparon según tres hipótesis de escenario: clásico, emergente-reemergente, y viajero. En la segunda etapa, para poner a prueba las hipótesis, se realizaron entrevistas en campo, entre agosto y octubre de 2011, a una muestra de selección intencional de pacientes distribuida proporcionalmente entre las tres hipótesis. Finalmente, en una tercera etapa, los datos generados para cada hipótesis de escenario se agruparon en tres escalas espacio-temporales: microescala (sujeto), mesoescala (localidad) y macroescala (región). Los resultados muestran que los nuevos lugares de transmisión estarían asociados a las dinámicas socioproductivas del cereal y las rutas al puerto

Experiences of COVID-19 and Perspectives on Vaccination: Key Findings from a Survey in Two Informal Settlements in Freetown

This brief outlines key findings from a survey carried out in two informal settlements in Freetown in April 2021, focusing on their perspectives of the COVID-19 pandemic, the national response to the virus and willingness to take a COVID-19 vaccine. The study was carried out by the Sierra Leone Urban Research Centre (SLURC) and the London School of Hygiene & Tropical medicine (LSHTM). Our findings point to high concern with COVID-19 in these communities, primarily related to the livelihood impact of the pandemic. Most respondents signaled that they would be unable to isolate a sick household member in their household, but also showed high awareness of and self-reported adherence to public health measures. The majority of respondents thought the government was making good decisions to respond to the pandemic at the time of the survey. For those whose trust in government had decreased since the onset of the pandemic, concerns about survival and food and job security were important reasons. Respondents who showed willingness to take a COVID-19 vaccine if offered one emphasized their wish to protect themselves and their communities, whilst hesitancy was associated primarily with concerns about vaccine safety. Hesitancy was more likely amongst those who are hesitant of vaccines in general, who had not heard of new variants (and may therefore have been less concerned about the virus) and those whose trust in government was partial to begin with or had decreased due to the pandemic. We conclude by putting forward key recommendations for addressing these issues with a focus on targeted community engagement, dynamic and adaptive pandemic response measures and specific efforts to build trust in the health system and the pandemic response. These findings are a snapshot from April 2021, but they highlight trends and characteristics of vaccine confidence to be monitored as the pandemic situation progresse

Il ruolo delle banche nell'offerta di servizi di gestione del risparmio

il contributo approfondisce il ruolo delle banche nella gestione del risparmio in un orizzonte europe

Restoring people’s trust in the single market for banking and finance

This contribution was delivered on the occasion of the EUI State of the Union in Florence on 03 May 2019The economic crisis has triggered a retrenchment of cross-border banking and finance in Europe. While the reforms of the last ten years achieved tremendous progress in the build-up of a common regulatory and supervisory framework across Europe, banking and financial activities are still organised along national borders, even within the euro area. This national fragmentation is ultimately driven by a lack of trust. Trust is missing among national authorities on the one hand and among national electorates on the other. The first continue to limit cross border banking, as long as the conundrum between risk-reduction and risk-sharing is not resolved. The latter, in particular households and businesses, struggle to perceive the benefits stemming from banking and financial integration in Europe, while they appreciated full well the social costs of generated by excessive financial growth and macroeconomic imbalances. Yet, as the US response to the crisis shows, integrated markets prove to be more resilient at absorbing shocks and restoring financing opportunities. The session aims to discuss the technical and political stalemate in which Europe seems to find itself with respect to these issues. In particular, it aims to investigate both the institutional underpinnings and courses of action needed to overcome this lack of trust and how to restore confidence with the goal of achieving an integrated European financial system

Banking supervision : global challenges and opportunities for the EU after the banking union

This contribution was delivered on the occasion of the EUI State of the Union in Florence on 7 May 2015.While most discussions in the EU relating to the financial crisis have thus far been mainly inward-looking, this roundtable discussion will seek to apply an outward-looking focus by exploring the potential for the EU to shape global standards for banking regulation and supervision in international standard-setting fora. It will consider substantive regulatory issues currently under debate internationally; as well as governance aspects such as EU representation and conditions for EU leadership in those fora