Financial Stability
‘Unlikely’ London’s financial hub will move to Europe – BoE’s Cunliffe
BoE deputy says London’s “complex financial ecosystem” is not easily transplanted; warns moving euro clearing system across channel would increase costs
Singaporean and Swiss regulators move against merchant bank in 1MDB scandal
Senior management pressured staff to ignore anti-money-laundering regulations, reports say
Top US and EU officials hold resolution war game
US, UK and eurozone central bankers, regulators and politicians participate in an exercise designed to improve the co-ordination of cross-border resolution
Targets key tool in reducing NPL levels, Irish deputy governor says
Banks can be unwilling to start sustainable NPL restructuring, Donnery says; repeats call for reform of European restructuring processes
Policy-makers need to be aware of the distributional impact of policies – Carstens
Hunt for growth needs to accommodate all, says Bank of Mexico governor; Carstens advocates a "three-pronged approach"
Danish governor attacks prime minister’s property tax proposals
Policy will risk further inflating the housing bubble, Rohde says
BoE investigates 6% plunge in sterling
Bank of England to investigate a 'flash crash' in sterling during overnight trading; traders believe it was not a ‘fat finger’ error
Mexican deputy supports more currencies in global system
Calafell says monetary system with more international currencies could result in “periods of turbulence”, but would be stronger than the current system
European Commissioner cautions US on TLAC rules
Dombrovskis says foreign banks should not be mistreated by Fed internal TLAC proposal
Bank of Russia announces prototype distributed ledger networking tool
Central bank planning further DLT prototypes, deputy governor says; Russia is excluded from using prototype DLT tools used in Western countries
European commercial bond market may suffer from lack of liquidity, ESRB says
Banks complain of effect of European regulations on liquidity; reporting on European fixed income markets still has “significant information gap”
‘Moral suasion’ and yield-seeking intensified sovereign debt crisis – ECB paper
Researchers use information on 226 eurozone banks; publicly owned, recently bailed-out and less strongly capitalised banks engaged increased sovereign bond holdings during crisis
Special purpose vehicles make ‘very limited’ contribution to GDP – Irish central bank study
Study permits a better analysis of "shadow banking" sector, authors say; concentrates on non-securitisation vehicles
Esma says regulators should wait before imposing quantitative SFT haircut triggers
Decision on policy change should wait until 2018, authority says; chairman says “sheer size” of market makes transparency important
Low growth and low rates to hit financial stability, says IMF
Weak outlook is likely to feed into medium-term problems for financial stability, fund warns; Basel Committee may have to delay agreement on final framework
Fed task forces begin review of faster payments proposals
Payments firms have submitted plans for real-time payment systems and toughened payments security; merits of plans to be assessed over coming year
Nabiullina promises ‘profound’ structural change for Russian banking supervision
Current structure “insufficient” to solve Russia’s problems, governor says; first deputy governor Tulin to oversee regulation and supervision
Central Bank of Solomon Islands commits to promoting private sector credit growth
Levels of liquidity “more than adequate”, latest monetary policy review says; central bank to maintain levels of liquidity by continuing to issue bills
Banks leaving London for Dublin must be ‘run from here’ - senior Irish official
Central bank planning to recruit more regulators if necessary, Cross tells financiers; hints at possible need to boost salary packages for some staff
Book notes: Connectedness and contagion, by Hal Scott
Scott’s argument on the dangers of contagion has many appealing features, although he may be too eager to hand powers to unelected officials, writes Michael Reddell
EBA dashboard shows capital on the rise but NPLs remain a worry
Regulators’ quarterly risk assessment shows EU banks’ capital ratios have ‘slightly increased’, but loan portfolios remain an issue
IMF financing ‘constrained’ policy space in Ukraine, report finds
Earlier debt financing would have been useful for Ukraine, report says, while praising central bank efforts to stabilise the financial system
BoE paper examines how US banks lend after hurricane shock
Local banks may play an “important role” in a geographically integrated banking system, paper says, despite their greater vulnerability to financial constraints
Independence, liquidity and a level playing field – yet another impossible trinity?
Jesper Berg warns it will likely be impossible to balance the demands of monetary policy independence, liquidity standards and achieving fairness for all banks