Measuring excess credit using the “Basel gap”: relevance for setting the countercyclical capital buffer and limitations

Cyril Couaillier and Julien Idier

Quarterly selection of articles - Bulletin de la Banque de France, 2017, issue 46, 5-18

Abstract: The indicator of excess private sector credit – the “Basel gap” – amounted to 1.8 percentage points at end-2016. At two percentage points, the European Systemic Risk Board considers that financial stability could be at risk and recommends that national macroprudential authorities activate the countercyclical capital buffer. But what does this indicator mean exactly? How is it measured? Is it robust?

Keywords: macroprudential policy; credit; debt; statistical methods; financial stability; financial cycle (search for similar items in EconPapers)
JEL-codes: C10 E32 E51 E58 G01 G21 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bfr:quarte:2017:46:01

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