Financial Stability
China’s path to financial deepening
Despite China’s quick progress in the sphere of manufactured goods, the country’s financial system has been a few steps behind, but that is steadily changing
CBRC's Shang Fulin on reforming bank profit models and dealing with non-performing loans
China Banking Regulatory Commission chairman Shang Fulin discusses how China's banks will respond to major financial market reforms while also addressing issues related to non-performing loans
Sponsored feature: Defining the ‘new normal’ in China
Setting ambitious targets and reaching them fast has been essential for more than three decades. But this growth-at-any-cost push is now being replaced with what China’s leaders call the ‘new normal’
Wilkins warns ‘a lot of work remains’ in implementing reforms
Canada’s senior deputy governor stresses need for coordination among regulators; suggests bilateral agreements could be useful given trend toward regional banking
Axel Weber slams ‘simplistic’ leverage ratio
Former Bundesbank president and now UBS chairman Weber says Basel III has not made the financial system better
Exchange launches asset-backed coins for asset managers
Asset managers will be able to trade physical assets directly with each other through new asset class dubbed ABCs, which will be tradeable on newly launched exchange Abacas
Turkish central bank acts as election prompts lira slump
Markets taken aback as president Recep Tayyip Erdoğan’s party falls short of majority; central bank measures fail to stop lira sliding to record low
Basel Committee lays out two tracks for banking book capital requirements
Consultation offers standardised option for greater transparency and comparability or tailored option to better account for regional characteristics – or a hybrid of the two
IMF deputy warns ‘leakages’ could undermine macro-prudential policy
Mitsuhiro Furusawa says macro-prudential tools could force financial activities into a less regulated sector or country, but adds little is known about benefits of ‘leaning against the wind’
Fed's Tarullo sees few signs of illiquidity in OTC markets
Fed governor says markets are in transition, while many actors are telling the Fed that it is harder to move large positions
Kohn targets more ‘systematic’ macro-prudential policy
Member of the Bank of England’s FPC says the committee should keep developing a more systematic approach to identifying risks and choosing tools to address them
Klaas Knot blames disharmony in regulation for higher risks
A lack of common standards in eurozone capital markets was an ‘aggravating factor’ in the run-up to the financial crisis, Dutch governor says; urges commission to add this to CMU proposals
Liikanen sees potential for payments revolution
Bank of Finland governor says we are yet to witness the emergence of a ‘true future payment system’ but it nonetheless feels like ‘something fundamental has changed’
Qualified support for central clearing of repos in Australia
RBA consultation attracts general support from market participants, but respondents say benefits rely crucially on strong take-up – the same issue that ended Australia’s last repo CCP experiment
Economists expect last-minute Greek deal
With Greek finances still looking close to collapse, Central Banking asks a group of economists what the consequences of a last-minute agreement or default might be
Regulators sound warning on collateral squeeze
Report calls on regulators to fix 'structural and regulatory limitations' around collateral
ECB’s Mersch wants pan-European instant payment system
Executive board member hopes to bypass national schemes and use Sepa infrastructure to deliver pan-European instant payments
PBoC takes ‘one of final steps' toward interest rate liberalisation
China's central bank allows companies and individuals to invest in CDs exempt from deposit rate cap; major move toward interest rate liberalisation, analysts say
Riksbank calls for ‘urgent' clarification of FSA’s powers
Financial stability report says FSA needs clearer powers to cope with rising risks in the financial system; wants major banks to strengthen capital and liquidity positions
Riksbank paper measures impact of debt-to-income limits
Report weighs the costs and benefits of debt-to-income limits, finding they can be effective in tackling debt and are likely to have a ‘relatively small’ macroeconomic effect
Buyer sought for RBNZ securities settlement system
Reserve Bank of New Zealand looks to sell NZClear after deciding it is no longer a ‘core business'; sell-off part of payment system facelift
Assessing risks from household debt is a complex task, Riksbank study finds
Economic commentary says risks in household sector seem high, but assessing them properly depends on a host of factors that keep changing and data that may not be available
Stanley Fischer praises BoE financial stability set-up as ‘leading model’
Fed vice-chair explores different arrangements for financial stability and concludes separate committee within central bank is a good model; does not rule out leaning against wind
Menon praises Asian strides in face of new bank regulation
Ravi Menon and San Francisco Fed's John Williams discussed banking reforms at one of three events hosted by Monetary Authority of Singapore last week