Procyclicality also leads, however, to greater volatility and ever-larger crashes. Think of a boat in which all the passengers rush to the port railing to catch a glorious view — causing the ...

Credit and regulatory policy are showing symptoms of the same inchoate procyclicality as fiscal policy | Finance & economics ...

The European Systemic Risk Board has published a report on mitigating the procyclicality of margins and haircuts in derivatives markets and securities financing transactions.

This paper examines the reasons for this, specifically focusing on regulations or market practices that can accentuate economic cycles. Although recognizing various practical limitations, new policy ...

The traditional risk-based margin models are risk sensitive but can be procyclical, especially under stressed market conditions. The issue of procyclicality has returned to the forefront of policy ...

In light of the uncertainties about valuation highlighted by the 2007-2008 market turbulence, this paper provides an empirical examination of the potential procyclicality that fair value accounting ...

During the past few weeks, prices of digital currencies have been continuously plummeting, as a result to the aftershock of the FTX crisis 1; though, ...

On January 8, the European Securities and Markets Authority (ESMA) published a consultation paper on draft guidelines on anti-procyclicality margin measures for central counterparties (CCPs).

Financial markets reflect changes in the economy. But sometimes they amplify them too. Both of these roles were evident as the Covid-19 (Covid) pandemic materialised. As the economic outlook ...

Procyclicality of margin is the term used to describe the fact that margin requirements for the same portfolio are higher in times of market stress and lower in calm conditions.

A further policy implication of valuations of the credit risk liquidity risk trade-off is to dampen perceptions of procyclicality in loss sharing arrangements. Abstract Accordingly, the default leg of ...

Procyclicality mechanisms in the financial system: what we know and some open questions. From bankunderground.co.uk. Financial markets reflect changes in the economy. But sometimes they amplify them ...