Steven Ongena, Raphael Auer, 14 January 2020

Targeted macroprudential policies may spill across sectors, but this does not mean that they are ineffective. This column shows how the effects of a countercyclical capital buffer designed to curb house price growth in Switzerland spilled over into commercial lending. But a model that matches the uncovered spillovers in volumes and interest rates shows that they by no means undermine the rationale for focusing policy measures on specific sectors. On the contrary, it suggests that regulators can avail themselves of this new tool to increase the overall resilience of banks

Natalia Tente, 21 April 2015

The Basel III countercyclical capital buffer framework obliges nations to set appropriate capital buffer rates for their bank’s credit exposure at home and in third countries. This column proposes criteria for selecting these third countries. The idea is to focus only on the third-country exposures that, firstly, could jeopardise stability of the domestic banking sector and, secondly, can be actually addressed by means of the policy. Variables and thresholds to operationalise this idea are proposed.

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