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International Monetary Fund. Research Dept.

2014c ). Regarding which indicators can help in deciding when to loosen macroprudential policies, the policy paper says that they should be relaxed when there are signs of increased frictions in housing markets that result in a spiral of falling house prices, falling mortgage credit, and increasing defaults and foreclosures. In general, while a fall in house prices can be a useful early-warning indicator for the emergence of such frictions, a softening housing market alone is not a sufficient indicator for the relaxation of macroprudential tools, and staff should

Mr. Julian T Chow
Guyana’s residential real estate prices have been rising, particularly in the capital city Georgetown, following the discovery of oil in 2015. In line with the growing demand for housing, commercial banks’ housing loans have increased, prompting higher household debt. This paper presents two analyses which suggest that housing prices in Georgetown and banks’ lending to the housing sector appear to be in their early stages of growth. However, given the data limitations and caveats that underpin the analyses, the findings could also indicate early signals of possible risks. Further data collection would support surveillance and deeper studies. At the same time, enhancing prudential measures would help safeguard financial and macroeconomic stability. These include strengthening the monitoring of the housing market, bank lending practices and household debt, as well as fortifying the macroprudential framework, including with more effective toolkits for early intervention.
Mr. Julian T Chow

further downward pressure on house prices. Strategic default, fire sales and contraction in the supply of credit can create negative externalities beyond the parties involved in financial contracts ( IMF, 2011b ; Geanakopolos, 2009 ; and Shleifer and Vishny, 2011 ). 28. Indicators that inform the tightening phase can be used for informing decisions to relax . Fast-moving indicators that could guide such decisions include house transaction volumes and spreads on household loans. A softening housing market is not sufficient alone to justify a relaxation. Evidence of a

International Monetary Fund

. Credit Flows to Households and Corporations 8. Risks to Households from Declining Income Growth 9. Risks to Households from a Softening Housing Market 10. The Impact of the Crisis on the Corporate Sector Tables 1. Initiatives to Stabilize the Financial System 2. Selected Economic Indicators 3. Indicators of Economic Performance 4. Balance of Payments 5. Selected Vulnerability Indicators 6. Fiscal Indicators Front Matter Page Front Matter Page INTERNATIONAL MONETARY FUND CANADA Staff Report for the 2009 Article IV Consultation

International Monetary Fund. Monetary and Capital Markets Department
This Technical Note provides a summary of the review of systemic risk oversight arrangements and macroprudential policy issues in Canada. The paper discusses the existing systemic risk oversight arrangements and potential challenges, and then presents steps that can be taken to modernize the framework to ensure its effectiveness going forward. The paper focuses on systemic risk surveillance, including the current approaches and existing challenges such as data gaps and coordination. It also covers macroprudential policy issues, including the toolkit, the current policy stance and overall policy effectiveness. The review recommends that steps can be taken to improve the current system with a more formalized arrangement for systemic risk oversight. A single body in charge of systemic risk oversight would be the first-best option. Over time, the authorities should review whether systemic risk oversight under the Heads of Agencies Committee leadership with no statutory mandate is adequate. Macroprudential policy at the federal level has been effective; however, better coordination is essential given multiple provincial authorities’ ownership of prudential tools.
International Monetary Fund. Monetary and Capital Markets Department

softening housing market due to monetary policy tightening and prudential measures . The long credit upcycle has led to a large, sustained credit-to-GDP gap, rapidly rising house prices in major cities (e.g., Toronto and Vancouver), and localized construction booms, all amidst an already high level of household debt. However, the credit cycle has turned. As of 2019Q1, credit growth moderated to 4.8 percent year-on-year. Several rounds of policy measures have successfully reduced insured mortgage lending and improved credit quality, with the share of banks’ new lending to

International Monetary Fund. Western Hemisphere Dept.

house transaction volumes and spreads on household loans. A softening housing market alone is not sufficient to justify a loosening of macroprudential measures. Evidence of a systemic stress is vital, such as simultaneous decline in prices and credit, and an increase in non-performing loans or defaults. In such circumstances, loosening macroprudential policies would reduce stress in the housing market. 25. The loosening of macroprudential policies needs to respect certain prudential minima that could safeguard an appropriate degree of resilience against future

International Monetary Fund
The staff report on Canada’s 2009 Article IV Consultation examines economic developments and policies. Canadian banks have weathered the crisis better than major-country peers, but the credit cycle will be challenging, particularly given high household debt. Financial instability is a tail risk, but heightened vigilance is warranted. The Bank of Canada has appropriately loosened monetary policy, bringing the policy rate target to a record-low ½ percent. Macroeconomic policies have adopted an expansionary tilt, and authorities have taken steps to safeguard financial stability.
International Monetary Fund. Research Dept.
The IMF Research Bulletin includes listings of recent IMF Working Papers and Staff Discussion Notes. The research summaries in this issue are “Explaining the Recent Slump in Investment” (Mathieu Bussiere, Laurent Ferrara, and Juliana Milovich) and “The Quest for Stability in the Housing Markets” (Hites Ahir). The Q&A column reviews “Seven Questions on Estimating Monetary Transmission Mechanism in Low-Income Countries” (Bin Grace Li, Christopher Adam, and Andrew Berg). Also included in this issue are updates on the IMF’s official journal, the IMF Economic Review, and recommended readings from IMF Publications.