Financial Stability
Mauritian governor explores low-growth puzzle
The government and the central bank need to work together in order to stimulate growth, Roi says, recognising each institution can only do so much
Peso depreciation is ‘necessary’ – Bank of Mexico report
Mexico’s relationship with the US has made it sensitive to economic policy decisions by its major trade partner; latest report explains the central bank will prevent exchange rate “contagion”
MAS charges two investors with orchestrating ‘massive fraud’
The two individuals are accused of largest market manipulation in Singapore’s history, as well as deceiving financial institutions into extending credit
Central Bank of Ireland eases burden on first-time buyers
Abolition of LTV caps means first-time buyers are now able to borrow up to 90% of the whole value of a property, the central bank says, while restrictions placed on banks’ loan book are squeezed tighter
Eurozone banks vulnerable to global risk repricing, ECB warns
US elections have “aggravated” risk of global repricing, which could trigger contagion in eurozone financial system, Vítor Constâncio says
Hong Kong proposes safeguards for contracts during resolution
Rules seek to protect some critical financial contracts during resolution without overly constraining resolution authorities
Financial markets should not write off uncertainty, says BoE’s Forbes
Bank of England deputy says the effects of uncertainty around Brexit could still materialise; uncertainty measures could “quickly shift”, says Forbes
Big data could create divisions in society – FCA’s Bailey
UK FCA chief says in some ways more accurate modelling of behaviour is a good thing, but it could also be damaging in terms of access to insurance for some groups
Bailouts more likely in unequal democracies – research
Accountable governments face pressure to preserve banks
Italian banks’ macro cycle “still weak” – Bank of Italy report
Italian central bank publishes latest financial stability report
Draft Irish law could compromise central bank independence, ECB says
Proposals would oblige central bank to promote competition in housing market
Bundesbank board member takes hard line on Basel negotiations
German central bank “not prepared to reach an agreement at any price”; calls for no universal output floors and abandonment of advanced approach for op risk
Armenia saw turbulent H1 2016 – financial stability report
Geopolitical risks and growth slowdown led to a difficult environment for banks, although they still managed to boost capital and liquidity
FSB updates systemic institutions list
Citigroup and HSBC swap places at the top of the rankings; ECB's “significant” banks list now at 127
BoE to adjust deposit protection limit again
Limits have seesawed in recent years, first due to the global financial crisis and more recently because of EU law
Bank of Canada paper explains decision to dilute ELA solvency requirement
Economists say emergency liquidity can play an important role in a resolution process, which led the Bank of Canada to amend its rules to allow for temporary insolvency
FSB’s agenda remains full going into 2017
Progress over past year includes loss absorbency, climate disclosure and shadow banking, though plenty of tasks remain for next year
Ringgit NDF market collapses after central bank curbs
“Implicit threat” to banks active onshore if they continue trading non-deliverable forwards
Yellen defends Dodd-Frank and Fed independence to US Congress
Act has made a “very significant contribution” to US financial stability, Fed chair says
European supervisors publish new anti-money laundering guidelines
Some firms concerned over national supervisors’ ability to regulate money laundering risks
Financial globalisation only good within limits, says Canada’s Lane
Timothy Lane flags the dangers of an open capital account for some countries, saying monetary policy in some countries may be “overwhelmed”
CCP default risks not correlated, CFTC finds
Timothy Massad: stress tests reveal “quite a bit of diversification” in CCP exposures
Market forces drive deleveraging as well as regulation – Caruana
BIS chief says markets are forcing discipline on banks, although he concedes regulation is playing a role as well; discussion participants point to tensions in regulatory framework
Fischer: liquidity is mostly adequate but there are problem areas
Fed vice-chair recommends vigilance amid changing market structure, though he says problems are not widespread; SEC chief says she is “deeply concerned” on bond market liquidity