Procyclicality - Revision history

Doug: Expand quote.

2023-11-22T01:13:54Z

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← Older revision		Revision as of 01:13, 22 November 2023
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	:Because bubbles are mostly financed by credit, most of the risk is shifted to lenders. This asymmetry in incentives is extremely difficult to eliminate [in advance].		:Because bubbles are mostly financed by credit, most of the risk is shifted to lenders. This asymmetry in incentives is extremely difficult to eliminate [in advance].

	:Hence the need, for ~~macro~~ supervisors, to monitor closely the financial system and preserve their possibility to intervene..."		:Hence the need, for macroprudential supervisors, to monitor closely the financial system and preserve their possibility to intervene..."


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	* [[Herd behaviour]]		* [[Herd behaviour]]
	* [[Leverage]]		* [[Leverage]]
			* [[Macroprudential]]
	* [[Procyclical]]		* [[Procyclical]]
	* [[Procyclical risk]]		* [[Procyclical risk]]

2023-11-22T01:03:21Z

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2023-11-22T01:03:02Z

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2023-11-22T01:00:48Z

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2023-11-22T00:57:35Z

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2023-11-22T00:56:17Z

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2023-11-22T00:21:44Z

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← Older revision		Revision as of 00:21, 22 November 2023
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	* [[Risk management]]		* [[Risk management]]
	* [[Supervision]]		* [[Supervision]]
			* [[Tail risk]]
	* [[Total Loss Absorbing Capacity]] (TLAC)		* [[Total Loss Absorbing Capacity]] (TLAC)
	* [[Trend]]		* [[Trend]]

2023-11-21T23:54:52Z

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← Older revision		Revision as of 23:54, 21 November 2023
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	:One major source of procyclicality is excessive risk taking. Bubbles develop because investors have an incentive to ignore the "tail risk" that the bubble may burst.		:One major source of procyclicality is excessive risk taking. Bubbles develop because investors have an incentive to ignore the "tail risk" that the bubble may burst.

	:Because bubbles are mostly financed by credit, most of the risk is shifted to lenders. This asymmetry in incentives is extremely difficult to eliminate ~~ex ante~~.		:Because bubbles are mostly financed by credit, most of the risk is shifted to lenders. This asymmetry in incentives is extremely difficult to eliminate [in advance].

	:Hence the need, for macro supervisors, to monitor closely the financial system and preserve their possibility to intervene..."		:Hence the need, for macro supervisors, to monitor closely the financial system and preserve their possibility to intervene..."
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	* [[Countercyclical]]		* [[Countercyclical]]
	* [[Countercyclical buffer]]		* [[Countercyclical buffer]]
			* [[Credit]]
	* [[Cumulative]]		* [[Cumulative]]
	* [[Cyclical]]		* [[Cyclical]]

2023-11-21T23:52:26Z

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← Older revision		Revision as of 23:52, 21 November 2023
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	:This points to the policy challenges regulators face.		:This points to the policy challenges regulators face.

	:They have to try and identify when pure cyclical fluctuations morph into something different: either a change in the trend itself or the start of a cumulative process."		:They have to try and identify when pure cyclical fluctuations morph into something different: either a change in the trend itself or the start of a cumulative process...


			:One major source of procyclicality is excessive risk taking. Bubbles develop because investors have an incentive to ignore the "tail risk" that the bubble may burst.

			:Because bubbles are mostly financed by credit, most of the risk is shifted to lenders. This asymmetry in incentives is extremely difficult to eliminate ex ante.

			:Hence the need, for macro supervisors, to monitor closely the financial system and preserve their possibility to intervene..."

2023-11-21T23:36:51Z

Add link.