Financial stability committees and the countercyclical capital buffer

Arbeitspapier

Multi-agency financial stability committees (FSCs) have grown dramatically since the global financial crisis. However, most cannot direct actions or recommend to other agencies that they take actions, and most would influence policy actions only through convening and discussing risks. We evaluate whether the significant variation in FSCs and other financial regulatory structures across countries affect decisions to use the countercyclical capital buffer (CCyB). After controlling for credit growth and the severity of the financial crisis, we find that countries with stronger FSCs are more likely to use the CCyB, especially relative to countries where a bank regulator or the central bank has the authority to set the CCyB. While the experience with the CCyB is still limited, these results are consistent with some countries creating FSCs with strong governance to take actions, but most countries instead creating weak FSCs without mechanisms to promote actions, consistent more with a symbolic political delegation motive and raising questions about accountability for financial stability.

Object Details

• ISBN: 978-3-95729-667-2
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Deutsche Bundesbank Discussion Paper ; No. 04/2020

Classification and Topics

• Classification: Wirtschaft ; Structure, Scope, and Performance of Government ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation ; Capitalist Systems: Political Economy
• Subject: Financial stability committees ; Bank regulators ; Delegation ; Macroprudential policy ; Countercyclical capital buffer ; Credit growth

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Edge, Rochelle M. ; Liang, Jean Nellie
• Event: Veröffentlichung
• (who): Deutsche Bundesbank
• (where): Frankfurt a. M.
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/214663
• Last update: 10.03.2025, 11:42 AM CET