Bitesize: Fixing ideas – The Slowing of Interest-rate Pass-through to Mortgagors

Fergus Cumming

When choosing a mortgage, a key question is whether to choose a fixed or variable-rate contract. By choosing the former, households are unaffected by official interest-rate decisions for the length of the fixation period. We can use transaction data on residential mortgages to get a sense of how long it takes interest-rate decisions to filter through to people’s finances.

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Bitesize: The travels of Montagu Norman

Mike Anson, Georgina Green and Ryan Lovelock

Montagu Norman was the Bank of England’s longest serving Governor (1920-44) and one of the leading players on the interwar international financial stage. He was a controversial and enigmatic character who pioneered co-operation between central banks.

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Bitesize: Risk-weight watchers: a probe into UK banks’ capital ratios

James Cui and Marcus Pettersson

Shortcomings of the Basel capital framework became apparent in the 2007-8 crisis. One much reviewed and debated issue is that capital ratios can be increased by changes to methods and models for calculating RWA (M&M changes hereinafter) rather than by changes to balance sheets. How have UK banks fared in this respect?

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Bitesize: Financial services exports and financial openness: two sides of the same coin

Carlos Eduardo van Hombeeck

The UK has a comparative advantage in financial services. But specialisation in this activity brings with it the challenge of the large gross capital flows that are linked to financial services exports.

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Bitesize: Are leasehold houses really a thing?

Andrew Blake

The so-called ground rent scandal has prompted the launch of a government consultation  into leasehold reform.  One surprise is just how widespread is the practice of selling newly built houses as leasehold, a practice that seems to have been growing over time. Given that the Land Registry publishes details of all housing transaction since 1995, plotting changes in the pattern of leasehold versus freehold for each type of newly built home is easy.

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Bitesize: Common ownership across UK banks: implications for competition and financial stability

Paolo Siciliani and Daniel Norris

Asset managers make it more convenient for savers to diversify their investments in stock markets. They are also in a better position to monitor the managers of firms in their portfolios, even if they adopted a passive investment strategy. However, it has been argued that competition might be weakened when firms competing in concentrated industries, such as airlines, share the same small number of institutional investors as their top shareholders.

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Bitesize Special: Fascinating Rates and Where to Find them

Changes in Bank Rate and other monetary policy instruments feed through to the real economy by various channels – including the rates of interest for borrowers and savers.  But in practice, there are many of these “interest rates” depending on the type of product, who is borrowing/saving, and on what terms. The Bank has recently published a new range of interest rate statistics that help policymakers, researchers and the general public better understand how policy changes feed through to household and firms in the economy.  Over the next four days, we’ll publish a bitesize post a day highlighting a different interest rate series and thinking about what it might mean for monetary conditions.

Bitesize: Tantrums, massacres and bond market reversals

Julia Giese and Matt Roberts-Sklar.

Government bond yields rose sharply in the UK in October 2016, following increased concerns about ‘hard Brexit’, and in the US since the presidential election in early November 2016. This chart puts these increases into historical perspective: moves in 10-year UK gilts and 10-year US Treasuries were of a similar magnitude to the 2013 US ‘taper tantrum’, the 2015 German ‘bund tantrum’, as well as in the so-called ‘bond massacre’ during the US 1994 tightening cycle.

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