Financial Stability
Belarus central bank reports ‘significant’ credit risk to country’s banking sector
A large proportion of Belarusian banks’ risky debts are owed as a result of financing government, central bank says; report echoes IMF call for major reforms to state-owned enterprises
Korea needs right kind of banking competition – quarterly bulletin
Competition can harm welfare if it is focused on gaining market share through a price war, authors say; Korean system may benefit from greater diversity
Paper outlines methods for creating country-specific banking crisis prediction models
Working paper tests models with country-specific and state-dependent parameters on a sample of 14 European countries; approach out-performs traditional early-warning models, researchers argue
Tajikistan objects to Basel Institute’s anti-money-laundering criticisms
The Basel Institute’s grading of Tajikistan as the third-worst money laundering jurisdiction in the world is based on an “absolutely incorrect analysis”, the country’s central bank says
Philippines leads improvement in Brookings financial inclusion rankings
The Central Bank of the Philippines says rapid progress last year reflects the success of its financial inclusion strategy; Brookings report highlights the importance of a wide-ranging approach
Solomon Islands’ Rarawa praises ‘innovative’ financial inclusion plans
Financing initiative for coconut industry promises to extend “digital banking penetration” in the Pacific nation, governor says
Basel reports target gaps in CCP resolution framework
Reports by CPMI-Iosco and FSB find there are still gaps in CCPs’ implementation of recovery and risk management principles and regulators need to think more about resolution planning
Islamic finance becoming ‘mainstream’ in Malaysia – BNM’s Ibrahim
Governor says Islamic finance has gone from a handful of firms to a quarter of the market in a matter of years; “pragmatic” approach may be part of success
Asset prices can signal abnormal inflation rates, paper argues
Asset prices can provide warning of forthcoming high or low inflation, a Netherlands Bank working paper says, but transmission times can be “quite long”
EBA suggests anti-money laundering measures for virtual currencies
Major new legislation or amendments needed to regulate payments in virtual currency, EBA says; suggests changes to proposed extension of regulation and calls for deadline for implementation
Bundesbank paper models ‘information contagion’
A Deutsche Bundesbank working paper presents a model of how “information contagion” can cause bank runs and attempts to quantify it using data on Canada’s banking sector
BoE researchers outline risk of collateral collapse
In stress periods, collateral chains could break, paper in forthcoming Journal of Financial Market Infrastructure warns
US enforcement actions stopped worse borrowing terms during subprime crisis, paper argues
Researchers compile database matching US enforcement actions to banks and their loans; price, duration and size of loans improved following enforcement actions, they argue
Swift CEO gives network top marks despite Bangladesh Bank theft
‘No room’ for complacency says Leibbrandt, noting it is now up to the banks to upscale their security infrastructure
Bank of Thailand's Veerathai on the Thai economy, governance and payment reform
Bank of Thailand's governor speaks to Christopher Jeffery about the resilience of the Thai economy, governance and payments infrastructure reforms, plus why he does not agree with the IMF
UK watchdog looks to new technology to ‘transform’ bank competition
Use of “open APIs” can enable easy data-sharing, which regulator hopes will give consumers clarity on bank charges and boost competition – though some see flaws in the plan
Malawian central bank sees legal risk to payments reform
Malawi payment infrastructure making ‘significant strides’, annual report says, but lack of legislation poses a risk
Payments revamp should cut costs in Thailand, governor says
In an interview with Central Banking journal, Veerathai Santiprabhob lifts the lid on payment system reforms aimed at strengthening infrastructure and promoting debit card usage
Nigeria tightens regulations on money transfer operators
Central bank's move will leave only three companies to deal with a remittance market worth more than $20bn annually, an analyst says
ESRB recommends EU states reciprocate Estonian capital buffer
European Systemic Risk Board’s recommendation is only second time it has suggested regulators should reciprocally adopt a new macro-prudential measure
IMF’s response to self-evaluation report ‘very positive’
Engagement with evaluation "very positive", says IEO official, after it offered broad support to recommendations, with some qualifications
ECB begins gathering data on daily money-market transactions
ECB announces daily collection of data from four money-market segments; scheme gathers 35,000 transaction records per day
Kenyan governor outlines three pillars for ‘new normal’ in banking
2016 to be a year of “transition” for banking in Kenya, says Patrick Njoroge; calls for greater transparency, stronger governance and new models
Malaysia’s central bank toughens corporate governance standards
Boards must have a majority of independent members and promote ethical, prudent and professional behaviour, Bank Negara Malaysia says