Financial Stability
BIS report highlights steps to curb sovereign debt risks
Basel working group outlines measures central banks can introduce to mitigate the risks associated with sovereign debt
LOLR creates incentive for banks to over-leverage: Netherlands Bank paper
A Netherlands Bank study finds central banks’ lender-of-last-resort function motivates banks to take on excessive risk
Israeli housing bubble in early stages: Bank of Israel paper
Bank of Israel study shows house price increases in Israel are not exceptionally high relative to past episodes
Former Vietnamese governor suspended over corruption scandal
After reports implicate Le Duc Thuy, a former governor of the State Bank, the country’s prime minister forces him out of public service
BoE’s Haldane highlights increasing risks from high-frequency trading
Bank of England executive director of financial stability Andrew Haldane outlines policy measures to reduce systemic threat posed by high-frequency trading
T2S framework agreement delayed due to four remaining issues
There are four remaining issues that are delaying the forthcoming Target-2 Securities (T2S) framework agreement, according to an industry leader from the European Central Bank (ECB).
BIS’s Caruana calls on central banks to lengthen policy horizon
Bank for International Settlements general manager Jaime Caruana says monetary policy strategy should be adjusted to contain build-up of financial imbalances
Deficits are not always bad: RBA’s Debelle
Reserve Bank of Australia assistant governor of financial markets Guy Debelle says current account deficits are not always bad and do not necessarily equate to an imbalance
Standard monetary policy rules don’t apply in liquidity traps: Dallas Fed
Dallas Federal Reserve study shows monetary policy should be complemented with fiscal policy in order to shift aggregate demand out of a liquidity trap
The new environment facing sovereign investors
Post-crisis, SWFs meet with less official resistance to investment, but markets are trickier and stakeholders no less demanding, writes Donghyun Park
Portugal downgrade reignites sovereign debt fears
Moody’s downgrades Portugal’s credit rating four notches to junk status; decision sends shudders through European markets as contagion spreads across periphery
Romania joins Target2
National Bank of Romania moves step closer to euro adoption with launch of national component of large-value euro payments system
Flight-to-safety common feature of crises: BIS paper
Bank for International Settlements study shows banks' flight-to-safety is a common feature in crises; says central banks were able to provide more liquidity this time round
BoE urges expansion of Chaps membership
Bank of England executive director of banking services Chris Salmon calls for broader membership of UK large-value payments system
Minneapolis Fed’s Kocherlakota urges review of US tax code
Minneapolis Federal Reserve president Narayana Kocherlakota says US lawmakers must reduce incentives by households and financial institutions to overleverage
Brazilian reserve requirements inefficient liquidity tool: Fed paper
Federal Reserve study says reserve requirements failed to provide adequate liquidity provisions in Brazil
Central Bank of Chile – Financial Stability Report (June 2011)
Central Bank of Chile June Financial Stability report identifies vulnerabilities in Chilean financial system
RBNZ: liquidity measures limited crisis damage
Reserve Bank of New Zealand study highlights effectiveness of emergency liquidity measures
Australian banknote makers charged with bribery
Securency and Note Printing Australia face bribery and corruption charges from Australian authorities; Reserve Bank of Australia cleared of any wrongdoing
Tucker hints at shifting BoE attitudes and policies
Paul Tucker, deputy governor at the Bank of England hints he might vote to raise interest rates; calls for new “social contract” with banks
FSB probes deposit insurance response to crisis
Financial Stability Board launches peer review of deposit insurance systems; highlights cross-border relations and crisis response
Fed extends temporary dollar swap lines again
Canada, UK, Switzerland and ECB prolong arrangements; Japan to decide soon
Eurozone authorities are losing credibility – CNB’s Singer
Credibility is key in crisis resolution and European authorities are failing to achieve, warns Miroslav Singer, the governor of the Czech National bank
Basel Committee will not impose CoCo requirement for Sifis
Basel Committee proposes a staggered common equity capital surcharge for systemically important banks, but steers clear of contingent capital