Financial Stability
Paraguay’s governor on the ‘new normal’ and inflation targeting
Central Bank of Paraguay governor Carlos Fernández Valdovinos explains why the global economy must adapt to the 'new normal' and how Paraguay is coping with falling commodity prices
Book notes: Between debt and the devil, by Adair Turner
Adair Turner offers a lively and well-structured account of his proposals to radically overhaul the financial sector
EBA publishes guidelines for co-operation agreements between deposit guarantee schemes
European Banking Authority lays out guidelines for agreements between EU deposit guarantee schemes; clear principles should lessen conflict and make mediation easier, authority says
Global growth has ‘flat-lined’, says OECD chief economist
Global economy expected to expand no faster than in 2015; current monetary policy stance ‘insufficient’ to spur growth
Book notes: Debtonator, by Andrew McNally
A lucid book questioning society’s bias towards debt and against equity
BoE’s Furse sees benefits to UK as a global finance hub
External FPC member sees plenty of reasons why policy-makers in the UK should seek to make the economy attractive to global financial firms; says robust institutions are important
BIS paper models self-generating financial crises
Authors set out DSGE model where financial crises can be triggered either by an external shock or the endogenous generation of credit booms and busts
Strong action needed to tackle credit booms, research finds
Study of macro-prudential policy use in south-east Europe finds policies must be broad, powerful and carefully calibrated if they are to work
EBA sets out standards for weighing securitisation ratings
Institutions must take 'qualitative' approach to weighing credit agencies’ ratings of securities in the short term, EBA says; advocates move to 'quantitative' approach over longer term
Fed’s Kashkari: more needs to be done to end too-big-to-fail
Minneapolis Fed president says 'transformational' approaches, such as breaking up the largest banks, should be given “serious consideration” in quest to end too-big-to-fail
Nouy says increase in European banking spreads not ‘justified’
Recent rise in credit spreads for eurozone banks does not appear justified, given their high capital levels, Danièle Nouy tells the European parliament
BIS paper examines impact of fiscal rules in Latin America
Authors note countries with rules with "wider coverage" and "supporting procedures" can be more stable; more widely, rules help them behave 'less procyclically'
BoE and Vickers clash on capital rules
Both central bank and ring-fencing committee chair claim to have recommended higher capital requirements than the other – but a look at the proposals suggests the differences are slim
Visitors to ‘play policy-maker’ at new MAS gallery
Monetary Authority of Singapore launches latest financial literacy initiative; visitors able to ‘play policy-maker’ through interactive programs
Bulgaria launches asset quality review and stress tests
Bulgaria’s central bank will conduct an asset quality review of commercial banks, followed by stress tests; the move is in response to the 2014 failure of the country’s fourth-largest bank
IMF paper questions ‘visceral opposition’ to inflow controls
Guilty by association: controls on capital inflows “inextricably” linked to those on outflows, paper says; controls not “worse” or “costlier” than other policy tools
Ukrainian central bank calls for parliament to pass consumer protection law
Ukraine’s central bank has called for the country’s parliament to pass two stalled laws aimed at protecting consumers of financial services as concerns grow over provision of foreign aid
Austria should ‘stand ready’ to tighten capital requirements, IMF staff say
The country has made ‘significant progress’ in restructuring the regulatory and supervisory framework, the report says, but the banking sector's resilience could be strengthened
Dudley says US households responding more cautiously to house price growth
New York Fed report finds housing debt has been relatively flat over past few years despite house prices rising steeply over the period; points to higher principal debt repayments
Rajan tells banks to prepare for ‘deep surgery’
RBI governor says banks will have until March 2017 to clean up their balance sheets; banking sector represents weak spot of otherwise vibrant economy
Hungarian ‘bad bank’ gets Brussels go-ahead
European Commission authorises Hungary’s ‘bad bank’ to begin purchasing distressed real estate assets; Hungarian government and EBRD to buy up part of Erste Group operations
Australian governor Stevens stresses policy ‘flexibility’
Governor says Reserve Bank of Australia has scope to ease monetary policy if need be, though economy expected to continue expanding