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Sweden is experiencing double-digit housing price gains alongside rising household debt. A common interpretation is that mortgage lending boosted by expansionary monetary policy is driving up house prices. But theory suggests the value of housing collateral is also important for household’s capacity to borrow. This paper examines the interactions between housing prices and household debt using a three-equation model, finding that household borrowing impacts housing prices in the short-run, but the price of housing is the main driver of the secular trend in household debt over the long-run. Both housing prices and household debt are estimated to be moderately above their long-run equilibrium levels, but the adjustment toward equilibrium is not found to be rapid. Whereas low interest rates have contributed to the recent surge in housing prices, growth in incomes and financial assets play a larger role. Policy experiments suggest that a gradual phasing out of mortgage interest deductibility is likely to have a manageable effect on housing prices and household debt.

Banks and Banking --- Infrastructure --- Macroeconomics --- Real Estate --- Industries: Financial Services --- Macroeconomics: Consumption --- Saving --- Wealth --- Demand for Money --- Money Supply --- Credit --- Money Multipliers --- Urban, Rural, and Regional Economics: Housing Demand --- Housing Supply and Markets --- Economic Development: Urban, Rural, Regional, and Transportation Analysis --- Housing --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Personal Income, Wealth, and Their Distributions --- Interest Rates: Determination, Term Structure, and Effects --- Property & real estate --- Finance --- Housing prices --- Disposable income --- Real interest rates --- Prices --- National accounts --- Financial institutions --- Financial services --- Saving and investment --- National income --- Interest rates --- Sweden

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Concerns about excessive variability in bank risk weights have prompted their review by regulators. This paper provides prima facie evidence on the extent of risk weight heterogeneity across broad asset classes and by country of counterparty for major banks in the European Union using internal models. It also finds that corporate risk weights are sensitive to the riskiness of an average representative firm, but not to a market indicator of a firm’s probablity of default. Under plausible yet severe hypothetical scenarios for harmonized risk weights, counterfactual capital ratios would decline significantly for some banks, but they would not experience a shortfall relative to Basel III’s minimum requirements. This, however, does not preclude falling short of meeting additional national supervisory capital requirements.

Banks and Banking --- Exports and Imports --- Industries: Financial Services --- Money and Monetary Policy --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financial Institutions and Services: Government Policy and Regulation --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- International Investment --- Long-term Capital Movements --- Policy Objectives --- Policy Designs and Consistency --- Policy Coordination --- Corporate Finance and Governance: Government Policy and Regulation --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Banking --- Financial services law & regulation --- Finance --- International economics --- Monetary economics --- Capital adequacy requirements --- Credit risk --- External balance assessment (EBA) --- Financial regulation and supervision --- Financial institutions --- External position --- Credit --- Money --- Banks and banking --- Asset requirements --- Financial risk management --- International finance --- Sweden

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This paper investigates macro-financial linkages in Egypt using two complementary methods, assessing the interaction between different macroeconomic aggregates and loan portfolio quality in a multivariate framework as well as through a panel vector autoregressive method that controls for bank-level characteristics. Using a panel of banks over 1993-2010, the authors find that a positive shock to capital inflows and growth in gross domestic product improves banks’ loan portfolio quality, and that the effect is fairly similar in magnitude using the multivariate and panel vector autoregressive frameworks. In contrast, higher lending rates may lead to adverse selection problems and hence to a drop in portfolio quality. The paper also reports that a larger market share of foreign banks in the industry improves loan quality.

Finance, Public --- Cameralistics --- Public finance --- Public finances --- Currency question --- Banks and Banking --- Public Finance --- Industries: Financial Services --- Exports and Imports --- Computational Techniques --- Financial Markets and the Macroeconomy --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financial Institutions and Services: Government Policy and Regulation --- Public Administration --- Public Sector Accounting and Audits --- Current Account Adjustment --- Short-term Capital Movements --- Finance --- Banking --- Public finance & taxation --- International economics --- Loans --- Foreign banks --- Commercial banks --- Macroeconomic risks --- Financial institutions --- Public financial management (PFM) --- Capital account --- Balance of payments --- Banks and banking --- Banks and banking, Foreign --- Fiscal policy --- Egypt, Arab Republic of

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Against the backdrop of high international food and fertilizer prices, this paper discusses food insecurity in Nigeria, investigates its drivers in a cross-country setting, and assesses the role of policies. Using two proxies for food security, we find that high per capita consumption, high yields and low food inflation support food security. Cross-country estimates of yields and production provided by the FAO/OECD reveal that use of inputs is lower in Nigeria than in other countries, and that policies to raise crop yields positively correlate with better food security conditions. The paper also uses detailed domestic commodity price indices to assess linkages with international prices and the role of import bans. Central bank policies for funding agriculture and import bans have not managed to stimulate agricultural output nor moderated the impact of international food prices. Rather, policies should focus on use of inputs that are severely underused in Nigeria as elsewhere in SSA.

Money and Monetary Policy --- International Economics --- Agriculture & Food Policy --- Macroeconomics --- Investments: Commodities --- Exports and Imports --- Monetary Policy --- International Agreements and Observance --- International Organizations --- Agriculture: Aggregate Supply and Demand Analysis --- Prices --- Agricultural Policy --- Food Policy --- Macroeconomics: Consumption --- Saving --- Wealth --- Agriculture: General --- Trade: General --- Monetary economics --- International institutions --- Poverty & precarity --- Investment & securities --- International economics --- Monetary policy --- International organization --- Poverty --- National accounts --- Commodities --- International trade --- International agencies --- Food security --- Food prices --- Consumption --- Economics --- Farm produce --- Nigeria

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Islamic finance has started to grow in international finance across the globe, with some concentration in few countries. Nearly 20 percent annual growth of Islamic finance in recent years seems to point to its resilience and broad appeal, partly owing to principles that govern Islamic financial activities, including equity, participation, and ownership. In theory, Islamic finance is resilient to shocks because of its emphasis on risk sharing, limits on excessive risk taking, and strong link to real activities. Empirical evidence on the stability of Islamic banks, however, is so far mixed. While these banks face similar risks as conventional banks do, they are also exposed to idiosyncratic risks, necessitating a tailoring of current risk management practices. The macroeconomic policy implications of the rapid expansion of Islamic finance are far reaching and need careful considerations.

Finance --- Financial risk management --- Risk management --- International Monetary Fund. --- MCD (International Monetary Fund. Middle East and Central Asia Department) --- International Monetary Fund --- E-books --- Banking law (Islamic law). --- Business. --- Finance (Islamic law). --- Finance. --- Business & Economics --- Financial Management & Planning --- Banks and Banking --- Finance: General --- Islamic Banking and Finance --- Financial Markets and the Macroeconomy --- Monetary Policy --- Central Banks and Their Policies --- International Financial Markets --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financial Institutions and Services: Government Policy and Regulation --- Other Economic Systems: Public Economics --- Financial Economics --- General Financial Markets: Government Policy and Regulation --- Portfolio Choice --- Investment Decisions --- Banking --- Islamic banking --- Islamic finance --- Financial sector stability --- Liquidity management --- Financial services --- Financial sector policy and analysis --- Asset and liability management --- Open market operations --- Central banks --- Banks and banking --- Islamic countries --- Financial services industry --- Liquidity --- Economics --- Malaysia