Financial Stability
Cambodia ‘caps microfinance interest rates’ – local media
85% of the country’s borrowers use microfinance institutions, the survey estimates
PBoC working to rein in shadow banking risks
Central bank is toughening its regulatory stance and tightening interbank liquidity as shadow banking products proliferate
Policy intervention helps economies escape ‘stagnation traps’ – paper
Research published by ECB explains how “pessimistic expectations” can lead to low employment and growth, dampening investment; countercyclical subsidies could be the answer
Shadow banking links leave EU banks vulnerable – ESRB paper
European banks are largely exposed to three types of shadow financial entity, study finds
RBA’s Bullock says central banks are ready to ‘take action’
Old school of thought regarding asset bubbles abandoned following financial crisis; macro-prudential tools are helping policymakers “clean up”
US deregulation may hinder adoption of Basel III – Dombret
Agreement has been reached on most German concerns, but the level of output floors is still key, says the Deutsche Bundesbank official
Bank Negara Malaysia looks to boost bond market risk management
Malaysia’s central bank discusses ways to enhance the bond market's breadth and transparency with participants; repos could be used to improve liquidity
FSB sets out proposals for governing ‘unique transaction identifier’
System should avoid “unnecessary complexity”, document argues
Latin American central bank interventions 'mitigate' liquidity shocks
Central banks more concerned with global factors than structural changes to forex markets; post-crisis regulation and tech advancements proving problematic for market makers
Federal Reserve Banks to work with Swift to make cross-border payments ‘more traceable’
US payment systems partner with Swift to improve cross-border payment speed and traceability; Federal Reserve Banks and The Clearing House make gpi available to clients
Seychelles governor underscores the challenges facing SMEs
Abel says they lack funding as well as non-financial support; central bank will work with commercial sector to come up with a strategy for SME lending
Deregulation could lead to further crisis – Lautenschläger
ECB supervisor worried by politicians’ calls for regulatory loosening
Foreign bank branches show more volatile lending – Norges Bank commentary
Foreign branches may be subject to lower capital requirements, giving them a competitive edge but also making their lending growth more volatile
Basel action needed before ‘regulatory cycle’ turns
Failure to reach a deal raises the risk of more entrenched protectionist positions
Loan-to-credit ratios affected stability of smaller German banks – paper
Bundesbank researchers look at data on “critical events” from 1995 to 2013
NPLs remain an issue, says Serbian governor Tabaković
Corporate sector accounts for 45% of total NPLs, notes governor
BIS authors spot structural break in bank financing
Research identifies turning point in how banks fund themselves around 2008, with greater reliance on branches and subsidiaries
EU stress tests should revise banking income assumptions, ECB paper argues
Fee and commission income likely to decrease more under “adverse” scenario, researchers say
RBNZ to rethink capital requirements
Review will reassess country’s approach to Basel III implementation, after Australia decides to bolster its banks’ capital to be “unquestionably strong”
Current account imbalances need to be addressed, Furusawa says
IMF deputy says imbalances in current accounts could increase volatility in the global economy; development of a safety net could reduce the need to accumulate reserves
BoE paper isolates loan supply impact of credit crunch
“Rich, tailor-made data set” informs study of how pre-crisis bank lending characteristics may have impacted post-crisis credit supply
Cyprus central bank calls for continuing efforts on NPLs
CBC calls for European law on insurance company resolution
Bank of Russia proposes major resolution reforms
New law would considerably extend the central bank’s powers
Danish central bank conducts $670 million FX intervention
Danish central bank conducts largest intervention in FX market since June 2016; analysts say demand for krone will continue, but interest rate hike is unlikely