Financial Stability
BIS quarterly review warns even high quality securitisations carry risks
Quarterly review article says even simple, transparent and high-quality securitisations create uncertainty, making estimating risks tricky, especially in mezzanine tranches
Basel Committee: US and EU capital rules still falling short
Basel Committee’s second assessment of compliance with Basel framework finds both EU and US are not complying in all areas, but both argue deviations are justified
Sweden's central bank and macro-prudential regulator clash over leverage ratio
Riksbank calls for stricter and earlier implementation of Basel III measure a day after Financial Supervisory Authority rejects proposals
BoE’s Bailey considers relevance of macro-prudential tools in insurance sector
Deputy governor says there is a ‘good argument’ for a macro-prudential response to a situation where insurers are liquidating their assets on a pro-cyclical basis
Iceland introduces foreign currency funding rule based on Basel Committee's NSFR
Measure is intended to limit extent to which banks fund long-term lending in foreign currencies with unstable short-term funding; Three-year NSFR could be introduced in 2015
Brainard says Federal Reserve monetary policy can ‘lean against the wind’
FOMC member says limited range of macro-prudential tools means Fed is more likely than some other central banks to use monetary policy for financial stability purposes – but there are risks
Resource costs of Australian payments system down as percentage of GDP
Consumers face similar cost for credit and debit card payments despite higher cost of credit cards to the economy, RBA paper finds
Bank of Canada's Poloz defends language on household imbalances
Governor explains Bank of Canada has not changed its assessment of household imbalances, after describing them as a 'significant risk' to financial stability in policy announcement
Ethiopia still ‘under banked’ despite 34% increase in bank branches
National Bank of Ethiopia reveals large increase in bank branches in annual report; argues there is still a need to ‘further develop’ the financial sector
PBoC highlights ‘rapid’ growth of electronic payments
Quarterly report on payments in China says electronic payments, particularly mobile payments, grew significantly in Q3
EU insurance stress tests reveal industry vulnerability to ‘Japanification’
Firms are vulnerable to a prolonged low interest rate environment and asset shocks, stress tests run between April and July show
Swift wins Australian real-time payments contract
Contract represents new direction for the financial messaging service, with the final platform expected to go live in 2017
National Bank of Angola works on deposit guarantee fund
National Bank of Angola has built a framework for a deposit guarantee fund in the country, which the governor says will cover ‘around 90% of depositors’
Nepalese governor sets sights on regional capital market
Yuba Raj Khatiwada identifies market infrastructure and corporate bonds as two key areas for development as Asia works towards greater capital market integration
Spain looks to create $7.5 billion resolution fund
Spanish government publishes draft bill that will transpose the BRRD into national law and establish a national resolution fund, in preparation for the SRM
PBoC closes in on liberalisation with deposit insurance plan
Central bank moves closer to deposit rate liberalisation with proposals for deposit insurance fund, aiming to improve ‘discipline’ in banking sector and encourage smaller banks to compete
BoE researchers posit dual model of interbank markets
Working paper separates exposures from funding to show the two parts of the interbank market have different structures; large ‘core’ banks present contagion risk
BoE paper says loan fair value techniques come with 'health warnings'
Researchers say it is unlikely that any one technique will capture all relevant aspects of valuation across all types of bank loans
ECB research explores use of NSFR as macro-pru tool
Economists consider how the net stable funding ratio could be used to tackle the build-up of systemic liquidity risks; research is still at an early stage
Bank of Finland paper sees inefficiencies driving China’s internet finance
Boom in internet finance presents stability risks and appears to be the result of inefficiencies in the existing financial system; authors recommend market-based reforms to redress the balance
New payments regulator in UK may have uneasy relationship with BoE
Treasury committee highlights potential for conflicting objectives between newly formed payments regulator and the Bank of England; Tyrie says independence ‘pretty heavily circumscribed’
Malaysian banks will use cheque fees to incentivise electronic payments
To reduce the use of cash and cheques in the financial system, Bank Negara Malaysia is introducing a scheme whereby cheque fees will be used to incentivise e-payments
ECB fears ‘abrupt reversal’ of global search for yield
Central bank says an end to the hunt for yield is the main threat to financial stability in the eurozone; Constâncio concerned by impact on investors’ balance sheets
Linde says Bank of Spain retains ‘important role’ in SSM
Bank of Spain governor says national central banks will play a vital role in the conduct of banking supervision under the new system