Financial Stability
Constâncio wants to ‘broaden’ European macro-prudential toolkit
ECB vice-president wants a broader macro-prudential toolkit to help smooth the financial cycle, including new instruments for the shadow banking sector
Rajan faults 'big borrowers' for eroding 'sanctity' of debt contracts in India
RBI governor calls for ‘change in mindset' where the ‘wilful defaulter' is ‘justly chastised as a freeloader' on hardworking people
Bank of Portugal gets new powers to assess bank directors
Bankers’ current court cases and their personal business conduct are now also part of the Bank of Portugal's assessment of the banking system
BoJ’s Nakaso sees opportunities for payments innovation
Options on the table include 24-7 real-time payment systems, improved cross-border linkages and better financial messaging systems
Malaysian banks working on a Swift rulebook for Islamic transactions
A Swift rulebook ‘will provide an efficient platform for the exchange of messages for Islamic finance transactions’, says governor of Bank Negara Malaysia
Global housing trends can predict domestic financial stability – Norges Bank paper
Crisis probability increases markedly when ‘bubble-like behaviour' in the housing and credit markets coincides with high leverage, research shows
Riksbank study questions status of cash as legal tender
Researchers warn ‘lock-in effect' may inhibit market participants from exploiting more efficient payment methods
Bundesbank explores macro-prudential framework
Claudia Buch says the central bank is 'looking into' what needs to be done to provide a legal basis for macro-prudential policy; Bundesbank releases financial stability review
ECB’s Cœuré calls for 'deeper analysis' of CCP crises
Benoît Cœuré warns questions still remain in the area of CCP failure; highlights needs to consider impact of multiple CCPs entering recovery at the same time
BoE picks Deloitte to review RTGS failure
Consultancy firm to conduct investigation into outage in real-time gross settlement system that saw system break down for several hours
Riksbank deputy assesses changing payments market
Cecilia Skingsley warns capacity of mobile networks is not always sufficient to manage ‘temporary peaks' in activity; also addresses ‘changeover' of banknotes and coins
CGFS pushes central banks to prepare market-making crisis measures
BIS committee warns of ‘bifurcated’ liquidity and suggests central banks prepare crisis measures to support market-making, including the potential for direct intervention in critical markets
Basel rate-risk project sets up scrap over deposit models
Attempts to set international capital rules for banking book interest rate exposures are hitting sensitive ground as banks warn lending will suffer if regulators cap deposit maturities
Dudley endures grilling on Goldman tapes
New York Fed president questioned by senate committee, including whether the culture at the Fed itself is up to scratch; Dudley contests claim NY Fed failed in supervisory duties
Central Bank of Ecuador trials mobile payments
A group of 800 people are testing the platform as part of pilot program; Central Bank of Ecuador hopes to tackle financial inclusion with the new technology
BoE’s Taylor defends complexity of leverage ratio plans
External FPC member says countercyclical leverage ratio may be more complex than a flat rate, but allows the Bank of England to be less heavy-handed with the rule and avoid perverse incentives
Draghi sets sights on capital markets at SSM inauguration
Mario Draghi says policy-makers can draw on new model for banking supervision when working to integrate capital markets; Danièle Nouy calls for consistent regulation across countries
New Zealand’s banknotes get first upgrade since 1999
Reserve Bank unveils a ‘brighter, more modern look’ for its banknotes, and a host of new security features; net cost will be NZ$40 million over five years
BIS' William Coen on Basel III and preventing the next crisis
William Coen, the secretary-general of the Basel Committee, speaks about the banking industry’s response to Basel III, supervision versus regulation and preventing the next crisis.
Book notes: What Have We learned? Macroeconomic Policy After the Crisis, by George Akerlof, Olivier Blanchard, David Romer and Joseph Stiglitz
This book brings together the great and the good of the economics profession, policy-makers and academics, to assess what the dust jacket describes as the “brave new economic world"
Linde: Spanish banks have ‘solid solvency position’
Bank of Spain governor says performance of Spanish banks during ECB stress tests was ‘positive’; banks face the future in a ‘solid solvency position’
BIS paper warns Basel III likely to prove ‘challenging’ for emerging markets
Working paper points to a number of obstacles to implementing the Basel framework in emerging markets and developing economies, and suggests potential solutions
Robert Pringle’s Viewpoint: Time to cure central bankers’ deflation phobia
The policies followed since the ‘great crisis’ have not succeeded in restoring confidence. It is time to try a different approach
Riksbank paper examines impact of systematic bailout guarantees on bank co-ordination
Bailout regime increases expected profits from co-ordination and raises probability of competitors remaining in business, researchers argue