The Unassuming Economist

“The CBK has been proactive in introducing macroprudential regulations in line with international practices to mitigate potential financial stability risks. The main source of vulnerability to the banking system comes from credit concentration to the corporate sector and real estate, given the structure of Kuwait’s domestic market, which the central bank regulates through concentration limits. The main sectoral exposures of banks are in real estate, equity and household lending, the latter two regulated through ceilings on equity investments and debt-to-income limits, respectively. Having tracked increased activity in real estate, Read the full article…

The latest IMF’s report on Turkey lists the recent macro-prudential policies implemented. To see the list click here. Read the full article…

“The global recession and regulatory tightening have helped deflate the housing prices with the losses falling disproportionately on the younger generations. House prices have declined by 27 percent in real terms since their peak in late 2008. The deflation of Dutch housing prices has caused massive losses of wealth which are unevenly distributed across generations. Younger house buyers are burdened by the lion’s share of losses in housing wealth. In addition to greater housing losses, younger households have not have sufficient time to accumulate pension claims and other (financial) assets households under the age of 35 have negligible levels of net worth,” Read the full article…

Here are links to papers and presentations for the conference. A link to the speech by Ratna Sahay will be posted later. Scroll down for links to papers and presentations on housing finance (by Frank Warnock, Veronica Warnock, Simon Walley); on urbanization (Somik Lall, Tony Venables); house prices in emerging markets (Hites Ahir, Mick Silver and Alessandro Rebucci); and the housing market in India (H. A. C. Prasad, Lalit Kumar, and Charan Singh). Also, see a blog by Min Zhu on Managing House Price Booms in Emerging Markets, Read the full article…

“The [housing market] boom, which took place during 2004–08, was among the largest in the euro-area, and was driven by FDI and rapid credit growth. The bust was triggered by a decline in FDI following the onset of the global crisis in 2008 and was exacerbated by falling domestic output and employment starting with 2009. Despite their sizeable decline to date, housing prices may have further room to fall before reaching equilibrium. House prices have already declined by 26 percent since their peak in 2008.

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