Financial Stability
Fed could use rates to counter instability – Mester
2015 exercise showed major problems in use of macro-prudential tools, says Cleveland Fed chief
‘Decisive’ action needed to deflate China’s credit boom – IMF paper
Lack of reliance on foreign financing, low government debt, and state control help to mitigate effects of credit boom, but buffers should not be relied upon in the long run
BIS paper asks what makes emerging market banks profitable
Both bank-specific and economy-wide factors affect banks’ profitability, authors find
BoE paper outlines big-data-based early warning indicator
Text mining approach seeks to capture how narratives can drive action in financial markets
Fed proposes expanding risk regime to foreign subsidiaries
New consultation suggests widening the scope of the August 2017 proposals to foreign-owned operations
Tanzania revokes licence of five banks
Rising NPLs and insufficient capital ratios in small banks source of concern, IMF says
Macao turns to facial recognition to fight money laundering
Chinese tourists now have to verify their identities in order to withdraw cash at most ATMs in the casino hub
Platforms win small on Mifid day one
Some dealers stopped quoting bilaterally on smaller bond trades
Colombian paper says resolution co-operation is needed in the region
Authors examine how resolution plans have evolved and conclude more work can be done with regard to local systemically important financial institutions and cross-border activities
FSB recommends global governance for UTI
FSB concludes ISO should publish and maintain the standard with additional governance from CPMI and Iosco
Complex instruments still pose systemic risks – paper
Discretion granted by financial reporting standards increases opacity and complexity, say authors
Book notes: Money in the Great Recession, by Tim Congdon
A stimulating collection of papers on the monetarist theory that had central bankers in late 2008 focused on boosting the quantity of broad money “the Great Recession would not have happened”
BIS issues new ‘streamlined’ stress test principles
Banks have made significant advances in stress testing since financial crisis, Basel Committee says; issues new ‘guidelines’ that focus on stress test evolution
Amended NSFR accommodates extraordinary monetary policy
Basel Committee issues its first technical amendment to the net stable funding ratio, to allow flexibility in the treatment of liquidity-absorbing operations
Patrick Njoroge on reshaping banking and finance to work for the masses
The Central Bank of Kenya governor speaks to Christopher Jeffery and Rachael King about exchange rate intervention, food prices, banking reform and financial inclusion
Some banks’ living wills have ‘shortcomings’ – US agencies
The latest assessment finds previous “deficiencies” have been corrected, but four banks show less serious “shortcomings”
BoE sets out post-Brexit supervision plans
Central bank says UK will aim to stay open as banks, insurers and CCPs are brought under the PRA’s oversight; changes imply heavy workload for the supervisor
GFXC publishes final word on last look
The Global Foreign Exchange Committee releases the new and final version of Principle 17, and adds two examples to illustrate best practice
Macro-pru tools helped offset taper tantrum – paper
Macro-prudential measures helped reduce the impact on cross-border lending growth, say authors
One big bank falls short of ECB’s capital requirements
One bank falls short and a second comes close, although five banks failed the test in 2016
UK households pessimistic about fortunes in 2018
Survey published by BoE reveals UK households do not expect an improvement in their financial positions in the coming year
Bank Indonesia to nudge more people to open bank accounts
The country aims to boost the percentage of the population with bank accounts to 75% by 2019