Financial Stability
Fed unveils stress scenarios under revised testing approach
Tests now include model enhancements, new phase-in methods and lighter requirements for some banks; the severe scenario has been turned up a notch
Macro-prudential spillovers may grow, paper argues
Bundesbank paper uses IBRN data to analyse cross-border effects of policy
Ingves sees cross-border resolution lessons from Swedish crisis
Crisis in the early 1990s prompted Swedish authorities to take early action on cross-border resolution, the Riksbank governor says
Esma sets out 2017 work programme
Strategy and governance among key priorities, Maijoor says
African regulators want regional regulatory structure – Basant Roi
“Political will” to support financial regulatory reform in Africa is “missing”, says Mauritius governor; IMF chief says resolution frameworks are “insufficient”
Some G20 initiatives have harmed EMs, says Mminele
Reforms have led to G-Sibs reassessing their business models, leading to a rise in de-risking, says Sarb deputy; Africa is seeing a “pronounced decline” in correspondent banking
FSB issues draft guidance on CCP resolution
Regulators’ powers should include “bail-in” and “full tear-ups”, FSB recommends; regulators should have resolution plans for all systemically important CCPs, including cross-border provisions
Draghi examines financial integration through a digital lens
Digitalisation will help with financial integration, but beware of the risks, says Draghi; fintech is high on the ECB’s strategic agenda
UK financial regulators finalise plans to strengthen enforcement and transparency
PRA and FCA publish measures that will keep financial firms better informed about investigations; new framework will “command public confidence”
Basel capital floors are necessary – Riksbank’s af Jochnick
Internal models have led to doubts over true capital adequacy, Riksbank deputy says, so floors have an important role to play
Global financial safety net hits snag in regional finance
Jeromin Zettelmeyer warns moral hazard problems are now more serious with the rise of regional funds; central bank swap lines could be a partial solution
El Salvador governor highlights benefits of increasing minimum wage
New minimum wage legislation will improve the living standards of 19.9% of households, says El Salvador governor; raise will also have positive impact on total economic growth
Irish central bank to survey credit unions’ controls
Central bank has “concerns” over quality of some institutions’ systems, deputy registrar says
Esma calls for more powers over rating agencies and repositories
Agency head says he is not sure if European Commission will act on his recommendations
BIS authors design game of asset managers
Authors model effects of cash hoarding and investor runs, finding that “hoarding is the rule, rather than the exception”, with implications for stress testing
Italian governor calls for reform of NPL regulations
Bank of Italy paper sets out proposals for sterilising effects of NPL sales
Forex code working group liaising with regulators – Debelle
Many regulators are interested in understanding how the code could be used to monitor market activity, working group chairman says; both FCA and Asic are in talks
Sarb deputy says G20 is ‘running the risk’ of being seen as inactive
Mminele says international leaders should intensify their “communication”, to foster inclusive globalisation; protectionist policies will not work in the current landscape, he says
LCH platform to provide risk calculations for margin hub
SwapAgent will send standardised sensitivities for bilateral trades to AcadiaSoft to make IM calls
Protectionism will undermine global trade recovery – Greek deputy
Mourmouras warns Donald Trump against enforcing protectionist policies, highlighting the negative effects it could have on global trade
FSB: ‘no immediate case’ for aligning rehypothecation rules
No pressing need to harmonise rules, but better monitoring of global collateral reuse will give regulators a clearer understanding, FSB says
IMF faces funding challenges, Irish paper says
Current funding set up is “fragile” with “significant uncertainty”, paper argues
PMA stresses accord with Israel as banks threaten to pull out
Governor Azzam Shawwa says Palestinian banks conform to global standards, as the Israeli government steps in to offer assurances to its banks providing correspondent services
Weidmann urges central banks to promote economic and financial literacy
Financial literacy is crucial in underpinning trust in central banks, German governor stresses; advancements in technology will help to boost financial inclusion