Financial Stability
European institutions agree vote on securitisation programme
Council of ministers and lawmakers will vote in the coming weeks
Growth in offshore funding is creating risks – RBNZ
Financial stability report notes growing reliance of banks on offshore funding sources could become a problem; housing market risks require new prudential tools
Sarb calls for comment on framework for deposit insurance scheme
Facility will provide cover of up to 100,000 rand in the event of a bank failure, with emergency liquidity from Sarb if necessary
Book notes: Crash Bang Wallop, by Iain Martin
A comprehensive study of the City of London and how it became the world’s leading financial centre prior to the financial crisis and the UK’s vote to leave the European Union
Spanish draft law would undermine financial reform, ECB says
Proposals on housing loan settlement would weaken “key pillar” of reform
Riksbank paper finds ‘significant’ gains from faster trading
Faster trading systems have eliminated arbitrage opportunities, improving market efficiency and quality, authors say
NPLs ‘must’ rise during downturns – MAS’s Menon
If NPLs failed to rise during “difficult times”, that would be a sign banks are not doing their job right, MAS chief says
MAS concludes 1MDB review with fresh fines
Credit Suisse and UOB fined $1.6 million collectively, with further individuals receiving lifetime bans
Bulgarian financial system still faces risks – IMF report
Financial safety net presents “important challenges”, despite reform efforts, IMF staff say
Israeli survey highlights benefits from ‘digital revolution’
“Tremendous changes” in the banking system are likely to benefit households and small businesses, the central bank says, while stability is also improving
Pure DLT systems not yet suitable for wholesale payments – Bank of Canada
The current state of distributed ledger technology makes it too inefficient to run as a pure system, though elements could still be useful, researchers say; details of RTGS project emerge
Household debt is ‘serious threat’ to Swedish economy - Riksbank
Banking system is also vulnerable, central bank says
Bank Negara governor defends efforts to curb NDF market
Malaysian central bank will continue its actions to improve market mechanism to facilitate an open and robust onshore financial system
BIS’s Coen warns of danger in delays as output floors remain stuck
Long phase-in periods increase risk of “dilution or backtracking”, says BCBS secretary-general; remains vague on timetable for Basel III completion
DLT expert: central banks should consider wider uses than just payments
Instead of payments, central banks should look to implement DLT for identity document transfer, says Michael Mainelli; expert takes more cautious view of the technology
Eurozone’s non-bank sector taking more risks – ECB
Insurers and investment funds moving to higher-risk assets
No Asean pan-regional regulator in near future – panellists
Divergent stages of development, a desire for sovereignty and the limited business case are hampering further integration, speakers say
Poorly designed macro-pru leads to ‘leakages’, says Turkish working paper
Macro-pru should be designed so firms cannot “bypass” regulations implemented during positive global liquidity shocks; generally policies are effective in controlling credit
Greek bailout talks end without agreement
IMF fails to agree that commission concessions would make debt sustainable