Financial Stability
Norges Bank deputy warns of vulnerabilities in financial system
“Sharp rise” in property prices and high household indebtedness are a concern, the latest financial stability report reveals; banking sector’s largest corporate exposure is to the real estate market
ECB’s economic bulletin paints mixed picture of eurozone investment
Business investment recovering overall but several factors may limit further growth, ECB says
Irish central bank levies record fine for AML and CFT breaches
Failures occurred over “extended period of time”, central bank says; case highlights need for controls over outsourcing of AML/CFT functions, says enforcement chief
Central clearing boosts welfare but margin matters – RBA paper
Study shows how central counterparties boost welfare by insuring against counterparty credit risk, but gains are sensitive to the level of margin
EBA recommends changing basis of resolution finance
“Crucial” that new measure reflect ability to call on funds in case of resolution crisis, EBA says; new measure should be based on total liabilities
Payments changing fast but cash still in demand – Riksbank survey
Telephone survey finds cash use declining and mobile payments on the rise, though demand for paper money not likely to disappear any time soon
Brexit may not lead to ‘new dominant location’ for European finance – Irish governor
Regulatory considerations should not drive firms’ location decisions, Lane argues
Obstacles may worsen for Russian and Turkish financial reformers, Italian paper says
Reforms in both countries left key problems unaddressed, researchers say
Ugandan governor emphasises banking system is sound
Tumusiime-Mutebile steps in to calm investors, dismissing negative reports following the acquisition of Crane Bank; banking system is “stable, sound and profitable”, he says
‘Overoptimism’ a factor in house price bubbles, Danish paper finds
Authors highlight how sentiment can become “decoupled” from economic fundamentals under certain circumstances
Banks not fully adapted to new prudential environment – BoE deputy
Firms need a “proper chance” to adapt to the “new world”, says Woods, warning that the banking system still looks fragile on some metrics, despite work by his predecessor, Andrew Bailey
HKMA expands offshore renminbi liquidity scheme
List of banks provided with liquidity for offshore renminbi market-making grows, with extra measures designed to boost transparency
Global crises raise need for digital financial inclusion – BIS’s Caruana
Refugee crisis, climate change, banking challenges and cyber crime all point to the need for better inclusion through the use of technology, says BIS chief
EBA recommends tighter regulation of European banks’ ‘large exposures’
Report calls for stricter limits on bank exposure to single clients and cautions against premature application of “standardised approach” to large exposures
ECB issues latest macro-prudential bulletin
Papers look at second order effects of financial shock, de-risking and high-frequency trades
Bundesbank board member calls for ‘moderate’ consolidation of German banking sector
Dombret criticises German banks for low cost efficiency and outdated business models
Macro-prudential policy can guard against global volatility – BoE paper
Tighter macro-prudential policies appear to reduce the sensitivity of capital flows to global volatility, paper finds
Fed raising bar for BNY Mellon – Powell
Fed working with treasury to ensure “smooth transition” as BNY Mellon becomes sole provider of government securities; bank must remain “robust”, says Fed’s Powell
Andrew Bailey looks to reboot UK conduct regulator’s ‘mission’
New chief executive seeks to clarify approach after stumbles in past years, admitting global understanding of conduct regulation still at an early stage
RBI’s Gandhi hails ‘silent revolution’ in payments
Incremental growth has revolutionised payments, deputy says, with more initiatives such as unified mobile payments interface set to deliver further change
ECB's bank watchdog warned on NPL clean-up drive
SSM may need clearer enforcement process to boost bad loan provisioning, says regulator
Macro-prudential rules must be reciprocated – Shafik
“Leakages” will reduce the effectiveness of macro-prudential policy if countries do not reciprocate changes in countercyclical buffers, BoE deputy warns
Hungarian central bank delays introduction of capital buffers
Move taken “to support lending” as banks sell off portfolios of “problem loans”
Japanese survey throws light on financial education problem
First large-scale study of financial literacy shows many people have poor understanding, contributing to higher loss aversion, herding behaviour and other problems