Financial Stability
Zeti Akhtar Aziz on crisis management, mandates and capacity building
Bank Negara Malaysia governor Zeti Akhtar Aziz speaks to Christopher Jeffery about her three-and-a-half decades spent tackling crisis management, capacity building and governance
IMF staff weigh options for tackling Chinese NPLs
Technical note authored by three IMF employees considers how securitising NPLs or converting them to equity might work in the Chinese context; latest CBRC figures show the stock is growing
Book notes: Lehman Brothers: a crisis of value, by Oonagh McDonald
McDonald's book offers a useful synopsis of the multiple failings at Lehman Brothers running up to 2008, but ultimately fails to add significantly to what was already known
RBI plans to regulate nascent P2P market
Central bank proposes bringing peer-to-peer lending within its regulatory remit, fearing lack of oversight might lead the rapidly growing sector to develop “unhealthy practices”
Panellists at ECB conference challenge complexity of macro-prudential set-up
Public and private sector representatives agree it is too early to judge macro-prudential framework; identify some positive elements but raise concerns about institutional complexity
BoE’s Cunliffe notes ‘gap’ between bank return and investor expectation
Investors should be prepared for lower returns in the coming year, Bank of England deputy says; risks to the housing market show signs of reducing but FPC poised to act if necessary
Time ‘ripe’ to consolidate public banks – RBI’s Gandhi
Consolidation could help banks spread their risk and compete on a global scale, deputy governor says – though they may need a “nudge” from government to get going
Fijian annual report shows ‘huge decline’ in mobile money active agents
Reserve Bank of Fiji documents 84% decrease in registered active agents, while number of people registered for mobile money increased
EBA publishes first complete list of European O-SIIs
European Banking Authority publishes first full list of other systemically important institutions in Europe; some national supervisors make more use of discretion than others
ECB paper explores public and private employment link
Research contradicts literature that claims an increase in public employment crowds out private employment, at least in recessions
BoE paper explores impact of prudential measures abroad on UK bank lending
No “significant” spillovers to bank lending following prudential measures, authors find, while composition of lending can change when domestic actions are taken
BoE paper seeks unified global approach to NPLs
A multidisciplinary approach to legal, accounting, statistical, economic and strategic elements of loan loss provisioning and NPLs
Constâncio points to systemic risk from investment funds
ECB vice-president Vítor Constâncio says increased size and risk-taking by under-regulated investment funds call for new powers for regulators
ECB sets out principles for designing backstop to single deposit guarantee scheme
ECB repeats call for single European deposit guarantee scheme; designing the scheme’s fiscal backstop will be key, financial stability report says
Hoenig warns reliance on long-term debt could represent systemic vulnerability
FDIC vice-chairman warns of danger of substituting long-term debt for equity and comments on disagreement with Fed over ‘living wills’
Macro-prudential policies should apply to shadow banking sector, researchers argue
Macro-prudential policies can have substitution effects between bank and non-bank credit, working paper says; macro-prudential policy should be extended towards the non-bank sector
FinCoNet offers regulators chance to advance financial consumer protection – chairman
The association of national financial consumer protection agencies has made progress in supporting reform, but has considerable work ahead, chairman Sheridan says
ECB paper models influence of financial fragmentation on eurozone crisis
Working paper published by ECB models the influence of financial fragmentation on three key stages in the eurozone crisis
Conditions for lifting capital controls ‘could hardly be better' – Guðmundsson
Central Bank of Iceland governor says it is important to press ahead with liberalisation while the economy is strong and financial system stable, in latest financial stability report
Carney speaks of ‘new’ financial system to support sustainable finance
Bank of England governor launches FAIR initiative; FSB members developing more ‘effective’ macro-prudential policies to support system
Troubled Kenyan bank to reopen under new management
Chase Bank will be managed by Kenya Commercial Bank, which may go on to acquire majority stake; questions raised over pressures on small and mid-sized banks
Basel Committee opts for local discretion on rate risk
Committee abandons attempt to create common global standard for interest rate risk, opting instead to leave discretion with banks and supervisors in final standards
Swedish regulator takes second stab at amortisation rule
Macro-prudential regulator unveils plans for mandatory amortisation similar to those struck down by the Swedish judiciary in 2015
Australian governor Stevens sees more viable options than helicopter money
Reserve Bank of Australia governor identifies a host of practical issues to helicopter money, and says there is more governments can be doing before then