Financial Stability
Mexico’s Carstens calls for continued trade cooperation with the US
Protectionist policies would be a step backward for both nations, Bank of Mexico governor suggests, saying continued cooperation will foster employment and investment
Esma calls for greater powers over national supervisors
Supervisor also wants the authority to pause the application of some rules
Brexit will be ‘litmus test’ for global system – Carney
Global financial system has reached “fork in the road”, says Bank of England governor; UK financial firms told to submit robust set of Brexit contingency plans by July
BoE proposes ‘amended’ sharia-compliant fund
UK central bank could launch a fund as soon as 2018, the consultation paper says; the facility would be off balance sheet in the form of a special purpose vehicle
Norges Bank’s Nicolaisen: covered bonds can create distortions
Covered bonds are widely seen as a safe asset, but they face risks and could have unintended consequences for markets
‘Ambitious’ capital markets union necessary – Constâncio
Better eurozone capital markets would smooth regional shocks, ECB vice-president says
Tarullo admits Volcker rule may be ‘too complicated’
Outgoing Fed governor says Volcker rule probably needs adjustment, though he warns against any measures that would weaken the capital regime
EBA provides guidance on bail-ins under European directive
Guidelines cover shareholders, debt-equity conversions and “grandfathered” assets
Mexican deputy: EMs should broaden trade strategy in wake of uncertainty
He takes note of uncertain political environment and what impact it could have on trade for emerging markets; exploring trade of services could be one option
Irish governor says bank is taking tough action on loan malpractice
Total of €78 million paid so far in compensation, Lane says
Fed paper searches for optimal bank capital
Study weighs higher cost of equity against the reduction in costly financial crises implied by higher capital, estimating an optimal figure
Senior central bank officials defend globalisation
Dombret and Mminele argue against the idea that globalisation is causing high unemployment and low growth, while stressing the negative impacts of protectionist trade policies
IMF praises Ukrainian central bank while disbursing $1 billion
IMF deputy managing director calls for continued support for central bank’s reforms
Debelle sets timeframe for adoption of forex global code
Market participants will have six to 12 months to adjust practices once the code is published on May 25
Buyers of risk in CDS market highly exposed, ECB paper finds
Researchers analyse credit default swap market using data from 2011 to 2014
Kosovo central bank joins supervisory agreement with EBA and neighbours
Supervisors from five other parts of former Yugoslavia joined in 2015
Tucker: policymakers should focus on resilience and clarity
Central banks would gain legitimacy if they could better explain their models of systemic crises, and if politicians specified a particular risk tolerance, says former BoE deputy governor Paul Tucker
ECB criticises draft Polish law on foreign-denominated loans
Draft bill could be even more expensive than previously abandoned proposal, ECB says
Danes claim top spot for EU card payments
Danish people use cards more than any other European Union nation, central bank report says, with electronic payments widespread
Basel Committee outlines enhanced disclosure framework
Revised Pillar 3 standard adds “dashboard” of banks’ key prudential metrics and consolidates all existing Basel Committee disclosure requirements
Ireland presents new financial consumer protection model
“More intrusive” model needed to counteract firms’ failure to change culture, bank says
Basel Committee to retain provisioning treatment as IFRS 9 launches
Committee admits differences across countries are likely to remain in the interim, while it works to design a new approach to the regulatory treatment of expected credit losses
Macedonia links up with EU payment infrastructure
Central bank announces local interbank payment system will connect with Target2 via the Bank of Italy; payments department manager says the development will enable smoother integration with the EU
Fed authors construct ‘financial stability sentiment’ index
Index derives sentiment from central bank financial stability reports, finding a drop in sentiment tends to precede a “significant deterioration” of financial indicators