Financial Stability
BIS deputy warns all economies must manage ‘sudden floods’ of capital
Advanced economies face the same floods of capital as emerging markets, and may be hit by other spillovers that are not yet well understood, Luis Awazu Pereira da Silva says
European regulation of investment firms needs reform, says EBA report
Micro-prudential regulation of investment firms in the European Union does not take proper account of risk and varies widely between countries and firms, an EBA report argues
Draghi calls for action on non-performing loans
Eurozone countries need wide-ranging reform of their systems for dealing with non-performing loans to stimulate the supply of capital to business, Mario Draghi says
Bank of Israel challenges interim competition report
Governor Karnit Flug warns of ‘marked risk’ to economic stability from some proposed measures; central bank argues they may hinder competition, not promote it
Bank of Canada identifies ‘prolonged weakness’ in commodity prices as a key risk
Latest financial system review suggests the resulting stress would be ‘manageable’, although an additional ‘large and broad-based drop’ would pose a bigger problem
HBOS investigation reveals possible ‘loose rivet’ in UK regulation
Accounting standards and auditing may be a weak point that is only just starting to be addressed, according to MPs at a parliamentary committee hearing on the failure of HBOS
Italian deputy governor warns on hurdles to capital markets union
The senior deputy governor of the Bank of Italy says capital markets union is necessary for the European economy but faces considerable obstacles
Brazil private growth expectations slide further
Brazilian economy will contract by 3.62% this year with inflation breaching the 10% barrier, private institutions say
New Zealand economists stress-test dairy sector
An article published by the Reserve Bank of New Zealand finds banking system losses would still be ‘manageable’ under the worst-case scenario for milk prices and farm values
Irish central bank to investigate fund manager fees
The Central Bank of Ireland intends to investigate the levels of fees charged by asset managers based in the country; review will be one of 12 ‘themed inspections’ of the finance industry
Bahraini central bank launches ‘almost real-time’ payments
Central Bank of Bahrain launches Electronic Fund Transfer System, comprising services for near real-time payments, deferred net settlement and bill aggregation
Global value chain key to realising growth potentials, says Sri Lanka governor
Mahendran says Sri Lanka has not integrated fully into the international value chain; former World Bank chief economist Lin discusses ‘new’ structural economics
BIS’s Shin highlights global liquidity dilemma for EMs
Head of research points to an uncomfortable balancing act among emerging markets exposed to foreign currency debt, which may be a factor behind the recent slowdown in their economies
Shocks to income have pushed Australian inequality higher, paper finds
Both income and consumption inequality have risen among Australian households due to the effect of short-term and long-term shocks to income, an RBA paper argues
UK banks must raise extra £27bn to meet resolution needs under BoE proposals
Large banks will have to issue additional subordinated debt to meet MREL requirement under proposals designed to ensure banks will continue to operate under resolution
Spanish paper finds issues with Basel III approach to calculating risk-weighted assets
The approach to calculating banks’ risk-weighted assets introduced by Basel III may create incentives for ‘regulatory arbitrage’, a Bank of Spain paper argues
Seacen Centre’s Genberg calls for research into effects of macro-prudential tools
Hans Genberg warns ‘we do not have much experience with the consequences’ of macro-prudential policies with respect to risk distribution and cross-border effects
Further macro-prudential policies ‘may be needed’ in UK, says IMF
Staff say existing measures have eased but not eliminated risks to household finances; encourage BoE to keep monetary policy unchanged until inflationary pressures are ‘clearer’
Nabiullina says ‘risk’ scenario for Russian economy more likely now
Governor Elvira Nabiullina fears oil prices may fall further and have an adverse affect on the economy, as the Bank of Russia leaves its policy rate unchanged