Financial Stability
‘Flash’ currency moves will continue to surprise markets – BoE’s Salmon
Bank of England executive director says there is “growing potential” for flash events to occur in core markets, despite markets now being able to identify risks
Russian central bank declares moratorium on bank's creditor payments
Peresvet Bank is 49.7% owned by Russian Orthodox Church; size of debts or political connections may make central bank’s task hard, analyst says
Bank of Russia closes more small banks
Institutions shuttered for liquidity shortages and AML/CFT breaches, central bank says
BoE paper maps contagion via CDS market
Economists identify mechanism whereby declining creditworthiness can spill from one bank to another via credit default swaps
EBA and Esma request clarification of CCP regulations
Agencies query areas of ambiguity for clearing houses’ derivatives transactions
Non-banks may amplify risks from policy divergence, Nakaso warns
Non-banks may be less constrained than banks in supplying dollar funding, but it could dry up at the first sign of trouble; the BoJ starts stress testing foreign currency liquidity
ECB paper compares financial inclusion in US and eurozone
Encouraging transfer payment recipients to open accounts has positive effect, study finds
Basel set to decide on capital relief for accounting changes
Phase-in to IFRS 9 and Cecl needed to avert "a dramatic overnight drop in regulatory capital", say auditors
Bank of Italy sells off three ‘good banks’ for €1
UBI Banca agrees to recapitalise banks created from regional lenders
Right culture is vital for insurance firms – Irish regulator
Sylvia Cronin says proper approach cannot be “regulated into existence”
Xi says China is open for business as US turns away
China to become a bigger player in global markets as US seems to be turning inwards, says President Xi; firms looking to invest overseas
Inflation is ‘simply not a problem’ – Dudley
New York Fed governor not worried about risks to inflation given recent data and expects current economic expansion to continue for the foreseeable future
Riksbank’s Skingsley says payments innovation needs balance
Central banks should use combination of “hands on” and “hands off” approaches, and strike a balance between innovation, stability and growth, deputy says
Policy tensions in China to become ‘more stark’ in 2017 – Menon
MAS head says China's authorities will have to use a fair amount of “policy dexterity” this year to deal with likely US rate rises and volatile international markets
BIS fails to find single cause of sterling ‘flash crash’
Report finds “numerous” factors which amplified the effects of the depreciation, including “inexperience staff” and “fragile” market conditions; lessons must be learned, BIS warns
Swift creates distributed ledger proof-of-concept
Swift, in conjunction with Hyperledger working group, will launch private distributed ledger network to help banks manage their cross-border payments
FSB finalises recommended action on asset management risks
Set of recommendations tackle liquidity, leverage, op risk and securities lending; work on globally systemic designations pushed back until 2019
Leveraged markets not a financial stability risk – Powell
Powell examines state of highly leveraged markets with eye to financial stability, judging they are not yet a problem
Carney admits Brexit is no longer UK’s biggest stability risk
Bank of England governor quizzed on importance of transitional arrangements for Brexit; external financial policy member defends forecasting, but admits “surprise” at the health of the economy
Defence and diversification key to fund success – HKMA deputy
Exchange fund is to continue diversifying into industries that can “counter” inflationary pressures, Yue says, as a challenging investment environment looks set to continue
BIS paper flags importance of “multi-layered” bank networks
Authors go beyond aggregate exposures to reveal “multiplex” interbank networks, which could allow more tailored policymaking
FMI transparency needs to improve, Chile deputy says
Central bank leading by example with regard to improved FMI transparency and governance; disclosure framework for central bank’s settlement system to be completed in 2017
RBI research arm tests blockchain for clearing, settlement
IDRBT releases white paper on the applications of blockchain, examining the benefits for the Indian financial sector; research group created proof-of-concept architecture to simulate clearing network
Central Bank of Philippines to improve surveillance – Tetangco
Philippines has “ample” policy space to respond to risks, governor says, but monetary policy will only be enacted to prevent inflation deviation