Financial Stability
High debt threatens financial stability in Norway, central bank says
Household debt ratios and rising property prices are the two main vulnerabilities for the system
‘Black box’ AI could pose macro risks – FSB
Rise of artificial intelligence in finance may promote efficiency, but it can be hard to tell where the dangers lie, report finds
BIS paper surveys financial shocks in Latin America
Authors study the most effective policy response to financial shocks in different countries
Supervisors must co-ordinate on ‘significant-plus’ branches – EBA
Guidelines set out advice for handling branches with “critical” functions
MAS bans individuals involved in 1MDB scandal
Six people involved in 1MDB-related breaches have been issued prohibition orders by MAS, with two more facing potential future bans
US senators chase regulators on Treasury market reform
Crapo and Warner push regulators to ensure reforms to improve transparency are still in the pipeline; gaps in data remain a concern
BoE’s Woods: 75,000 Brexit job losses ‘plausible’
Deputy governor estimates 10,000 finance job losses on first day of Brexit, with wider long-term repercussions
Internal capital reallocation matters, BIS paper finds
Authors model response of a bank to tightening capital constraints, shedding light on how banks may respond to changes in their environment
Paper examines EM response to global liquidity shocks
Emerging markets reduce rates and increase reserves in the face of positive liquidity shocks
FCA’s Bailey: firms need Brexit clarity fast
Financial firms will have to make decisions over the coming months that will be very hard to unwind, so certainty on the Brexit transition is pressing
BoE paper scrutinises 2016 sterling flash crash
Paper makes detailed study of the “flash episode”, concluding later price drops were abnormal
Too soon to start celebrating economic improvements, says Mminele
Sarb deputy warns against complacency in latest economic roundup, saying it is too soon to start celebrating lower inflation and a more stable external environment
BIS could have done more to convey capital benefits – Caruana
Outgoing general manager says he would like to have better conveyed the “positive message” around capital, and made more progress on policy spillovers
Bank of Zambia to revamp ‘outdated’ supervisory framework
IMF praises the central bank’s efforts to inspect banking sector following overhaul of monetary policy framework in last 12 months
DLT has ‘more potential for change’ outside US – Boston Fed VP
Jim Cuhna says distributed ledger technology can transform financial services not only in payments but also in securities settlement; challenge is finding use cases
Brazil loosens prudential regulations for non-banks
Small non-banks’ regulatory processes will be made cheaper under new legislation, while capital requirements will be reduced
IMF’s Lipton says global growth is not ‘strong enough’
Deputy director says some emerging markets risk getting left behind
RBI welcomes $32 billion public bank recapitalisation
Government unveils funding package designed to free India’s large public banks from a heavy burden of non-performing loans
BoJ says Japan is overbanked
The central bank says Japanese banks may have too many employees and branches