Financial Stability
Reviving the faltering euro economy
There are three options to address Europe’s core problem: real differences in production costs. None of them involve asset purchases by the European Central Bank, writes Allan Meltzer
Evaluating the IMF’s performance in the financial crisis
The results of the IMF’s Independent Evaluation Office investigation into the Fund’s handling of the global financial crisis are deeply flawed.
Book notes: Don’t start from here, by David Shirreff
A pointed, passionate plea for a simpler banking system that deserves to be taken seriously
Book notes: Emerging Africa, by Kingsley Moghalu
Sub-Saharan Africa is no basket case, but neither is it poised to follow China and India on their meteoric economic rise, Kingsley Moghalu argues in his forthright book
Book notes: European Spring, by Philippe Legrain
Ambitious and accessible, this book's take on events is provocative and its alternative insights warrant reflection
BoE paper identifies issues in measuring ‘too big to fail’
Research assesses different approaches to measuring the scale of the ‘too big to fail’ problem, and finds none is without issues, but different approaches still identify effects
House committee calls on Fed to change leverage ratio
Segregated initial margin should be allowed to reduce exposure in cleared trades, says House Agriculture Committee in letter to Fed chair, Janet Yellen
IMF paper tackles puzzle of asset bubbles in efficient markets
Working paper suggests business risk for asset managers creates institutional herding and ‘rational bubble-riding’, with implications for the design of macro-prudential policies
Dutch paper finds global banking system has adopted ‘a more regional focus’
Researchers say global banking has not become more fragmented, but has undergone some ‘important transformations’ since the crisis
RBA’s Debelle exerts pressure over FX benchmarks
Guy Debelle warns the likelihood of a ‘regulatory response’ on forex benchmarks will ‘substantially increase’ if FSB-approved recommendations are not met
Carney: Expectations of Fed tightening could trigger ‘sharp adjustment’ in financial markets
FSB chairman says the ‘ongoing disconnect’ between risk-taking in financial markets and the real economy ‘poses the threat of sharp adjustments’
BoE’s Furse warns liquidity has become ‘more fragile’ in some markets
Post-crisis measures have increased bank resilience, but have also ‘altered the economic model’ for capital markets intermediation
Cyprus central bank governor sees confidence returning
Chrystalla Georghadji says historically large investments in the Cypriot banking sector are a reflection of the international community’s growing confidence in the country
Esther George questions macro-prudential approach
Kansas City Fed president says macro-prudential approach ‘expects too much of tools for which our understanding is imperfect' in Philippines speech
Irish central bank targets consumer-first culture
New report from the central bank reveals focus on culture within the financial industry; head of consumer protection tells Central Banking about the institution’s plans
BIS sees cross-border liquidity reverting to historical trend
Latest global liquidity indicators show low volatility combining with rapid cross-border credit growth; researchers challenge simple supply and demand theory of oil-price slump
Good data vital for effective financial inclusion policies
With the World Bank soon to release the first update to its global financial inclusion database, Central Banking speaks to the Alliance for Financial Inclusion on the importance of good data
Pakistan targets automated cash management in five years
State Bank of Pakistan aims to automate cash management and urges commercial banks to follow suit; deputy governor says it will help ensure only clean and genuine notes circulate
IMF: Pan-African banks pose oversight challenges
Report highlights need to reconcile regional and national interests in currency unions in the continent to ensure effective regulation and supervision
Wheeler: RBNZ will ‘talk more’ about housing
The Reserve Bank of New Zealand will focus on the market in coming months, Wheeler says, with house price inflation ‘increasing again’ in Auckland
Impact study postponed for Basel rate-risk project
An impact study for a Basel Committee proposal on the standardised regulation of banking book interest rate risk has been pushed back. Regulators blame the delay on banks' IT constraints
Curbs on rehypothecation may boost welfare, St Louis Fed paper finds
Researchers find rehypothecation boosts welfare, particularly as inflation rises, but it generally goes too far, implying there are benefits to regulatory intervention
BoE’s Kohn and Taylor foresee FPC divisions
Financial policy committee is likely to rely more heavily on voting in future, Donald Kohn and Martin Taylor tell MPs; Andrew Tyrie attacks accountability and calls for review
FSB: Bank of Russia's financial stability mandate unclear
Peer review calls for 'adequate' legal basis to impose macro-prudential measures; warns mandate of separate advisory body 'seems to duplicate' that of central bank