Financial Stability
Rosengren eyes balance between bank resilience and loans
Boston Fed president tells New York conference that supervisors should encourage banks to maintain lending when striving to meet capital-to-asset ratios, but stress the need for quick recapitalisation
BoJ establishes working groups to consider how to make best use of BOJ-NET
Working group to look at ways to make effective use of settlement system; BOJ-NET to process more transactions across time zones
IMF will ‘take stock’ of capital flow policies
IMF may undertake further work on capital flow management and foreign exchange interventions if analysis highlights need for it; fund will also re-examine global safety net
Progress on resolution frameworks has slowed, FSB warns
Few jurisdictions have all the rules in place and legislative progress is slowing, Financial Stability Board says in its latest peer review of resolution regimes
Researchers propose adapted methodology to assess money market microstructure
The standard algorithm used to assess bilateral exposures in the interbank market needs adapting to make it robust to zero and negative interest rates, two economists argue
Bank of Russia unveils framework for insurance industry regulation
Russia’s central bank will monitor insurance companies for compliance with financial ratios and other indicators; has set up institute for risk management in insurance industry
Tests find New Zealand banks ‘robust’ to dairy stress
Stress tests conducted by the Reserve Bank of New Zealand in late 2015 find five largest lenders to dairy sector can withstand further drops in payout and land values
Bank of Japan ramps up efforts to prepare infrastructure for disaster
Central bank calls for examinations of business continuity plans, learning from the 2011 earthquake, in rare report on payments landscape; BOJ-NET extends operating time
Riksbank flags concerns over pace of development in payments
Tech development proceeding ‘too rapidly’, says central bank; evolution of payments could jeopardise access
Banks start to clean up balance sheets after RBI asset quality review
Efforts will enable flow of credit in the long term, deputy says; improving capital buffers and governance structures also beneficial
San Marino’s new central bank chief faces NPL challenge
Staff at IMF stress need for “comprehensive strategy” to clean up balance sheets in the banking sector; Wafik Grais takes office as chairman of the central bank after prolonged vacancy
PBoC and MAS extend $46bn swap line
Renewal of currency arrangement follows deepening of cross-border integration measures introduced last year
Romanian government policies may put financial stability at risk, IMF and EC staff say
European Commission and IMF staff raise concerns over some measures, including draft laws on loans and debt clearance; IMF staff suggest the central bank adopts a “tightening bias”
Zimbabwe central bank calls for flexibility on SME credit
Number of areas still at risk from financial exclusion; only 14% of MSME owners were banked, and only 1% of the adult population used capital market services in 2014
Stressed governments persuade banks to increase bond buying, paper finds
European governments under fiscal stress persuaded domestic banks to increase their holdings of sovereign debt, a paper from The Netherlands Bank finds
Flug outlines state of play on Israeli credit information database
Governor says new database established and operated by Bank of Israel will strike a balance between being comprehensive and relevant; key appointments to follow
Macro-prudential policy must give guidance on how to deleverage, paper says
Different deleveraging methods have varying effects on the economy, ECB working paper finds; policy-makers must give banks concrete guidance on how they implement certain measures
Basel disclosure proposals add ‘dashboard’ of risk metrics
Fresh proposals on Basel III disclosure aim to simplify comparison of banks’ prudential positions; banks will also have to disclose “benchmark” risk weights based on standardised approach
Bank of Russia obliges non-banks to join officially recognised self-regulatory bodies
All non-bank financial institutions in Russia must join one of seven officially recognised self-regulatory organisations; newly formed companies must comply within 180 days
RBNZ keeps settlement system due to lack of suitable bids
The Reserve Bank of New Zealand will retain its securities settlement system and depository, despite hoping to find it a new owner; also investing in separate platforms for NZClear and Esas
EC urged to target initial margin for CCP recovery
Irish central banker says haircuts should be seen as temporary loans to CCPs in a crisis
Sama completes payments infrastructure upgrade
Infrastructure overhaul allows faster card payments and higher volumes, supporting the expansion of electronic payments in Saudi Arabia
Montenegro should create dedicated ELA ‘subaccount’ – IMF staff
Euroisation is hindering the Central Bank of Montenegro’s ability to act as lender of last resort; IMF staff call for a strengthening of ELA capacity through a “subaccount”