IMF Post-Program Monitoring Report on Ireland notes the unusual risk profile of the Irish banking sector

The IMF has released its latest post-program monitoring report for Ireland. What is notable in the report is how it highlights the still very-high-risk profile of the Irish banking sector, and the policy quandary regarding encouraging housing construction without endangering another Irish banking sector crash over the medium term. Despite a strong, three-year-long domestic economic expansion, Irish mortgage loans remain an unusually risky asset class.

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Conference on macroprudential regulation

A conference with the theme Macroprudential regulation: policy dynamics and limitations will be held on Friday January 29th, 2016, at the Institute of Banking, North Wall Quay, Dublin, organized by the Financial Mathematics and Computation Cluster, the Department of Economics, Finance & Accounting at Maynooth University and the UCD School of Business at University College Dublin. The conference schedule appears below.

There are no attendance fees for the conference, but attendees need to register. We are grateful to the Science Foundation of Ireland and the Irish Institute of Banking for their generous support of this conference. The Financial Mathematics Computation Cluster is a collaboration between University College Dublin, Maynooth University, Dublin City University and industry partners, with support from the Science Foundation of Ireland.

10:00 – 10:30  Registration and poster session

10:30 – 10:35  Welcome and introduction

Theme 1: Measuring Macroprudential Policy Needs and Policy Effectiveness

10:35 – 10:55  Marcelo Fernandes (Queen Mary University), “Response to supervisory stress tests”

10:55 – 11:15  John Fell (European Central Bank), “Credit flow restrictions: Implementation and coordination issues”

11:15 – 11:25  Coffee break

11:25– 11:45  Scott Frame (US Federal Reserve), “The failure of supervisory stress testing: Fannie Mae, Freddie Mac, and OFHEO”

11:45 – 12:05  Eugenio Cerruti (International Monetary Fund), “The Use and effectiveness of macroprudential policies: New evidence”

12:05 – 12:25  Panel discussion

12:25 – 13:25  Buffet lunch and poster session

Theme 2: Housing Markets and Macroprudential Policy

13:25 – 13:45  Gabriel Brunneau (Bank of Canada), “Housing market dynamics and macroprudential policy”

13:45 – 14:05  Kieran McQuinn (Economic and Social Research Institute), “Macroprudential policy in a recovering market: Too much too soon”

14:05 – 14:15  Coffee break

14:15 – 14:35  Christoph Basten (Swiss Financial Supervisory Authority), “Countercyclical capital buffers in Switzerland”

14:35 – 14:55  Angus Foulis (Bank of England), “The role of credit in the US housing boom: Insights from tiered housing data”

14:55 – 15:15  Panel discussion

15:15 – 15:20  Closing remarks

New York Times: A Migration Juggernaut is Headed for Europe

Eduardo Porter, one of the most highly respected economic analysts in the US media, has an interesting, thoughtful new article on European immigration pressures. He argues that European economies and societies need to prepare for large-scale immigration from Africa, the Middle East, and South Asia. These regions are close to Europe, are notably poor by world standards, and have a forecast population increase of three billion in coming decades, on top of the large increases which have already occurred in the recent past. Porter argues that attempts to stop completely this migration pressure will not succeed, and instead Europe should try to adjust to an inevitable large inflow.

Insider or Outsider? Bloomberg article on Honohan succession

There is a brief article in Bloomberg Business today about the search for a new Irish Central Bank governor.

“Ireland is about to deliver evidence on whether, nearly two years after regaining its economic sovereignty, much has really changed. ……   Noonan’s dilemma now is whether to move back to the pre-crisis mode of finding a governor from inside the civil service, or repeat the Honohan recipe and appoint another outsider.”

The Paddy Power betting odds are discussed. As a financial economist, I am forbidden by the Efficient Market Theory from making gambling bets, but perhaps some of the labour/macro economists might want to take a punt.

I had an earlier post on the strategic issues around this appointment. The recent China-related volatility in financial markets is the latest difficult policy problem confronting monetary authorities in Europe and globally. Ireland should appoint someone as governor who can serve both domestically and also contribute to ECB council deliberations.

Since some readers will know some of the people mentioned personally, I blocked the comments feature.