Financial Stability
Bank of Mexico cuts growth outlook on virus fears
Central bank says future growth is highly uncertain after Mexican economy contracted in 2019
Trust is crucial to eurozone interbank markets – ECB paper
More bank failures or longer-lasting crises lead to smaller interbank markets, researchers find
BoE to impose Libor-linked collateral penalties
Andrew Hauser says regulators will employ carrots and sticks as deadline for transition looms
Cyber risks cost 2-3% of profits at banks and insurers – RBNZ research
New Zealand central bank finds chance these threats may cause much greater losses
‘Systemic cyber incidents’ could cause major damage – ESRB
EU body says cyber attacks could reach “tipping point” and freeze financial sector
Cost of AML/CFT regulation could spell trouble for Barbados
Central bank governor urges financial firms to take risk-based approach to prevent excessive de-risking
Why Bulgaria needs to deepen its currency board
The BNB’s currency board rules should be extended to transaction deposits at commercial banks, which could in turn issue digital currencies, even in the event of euro adoption
IMF chief warns of ‘dire’ coronavirus scenarios
Virus has already impacted global growth but effect could worsen if containment fails
Securitisation can increase risk – Bank of Italy paper
Periods of high demand for safe assets can lead to riskier originated loans, authors say
Bank of Korea will superheat banknotes to stop coronavirus
People looking to exchange currency will have to go through heat monitor
Some countries’ macro-pru measures have reduced systemic risk – IMF paper
Denmark and Czech Republic particularly successful in cutting mortgage risk, researchers find
Swedish central bank will test DLT-based digital currency prototype
Sveriges Riksbank and Accenture project to use simulated agents to test ‘e-krona’
Competitive devaluation would harm US, Brookings paper warns
Trump’s calls to devalue currency would have damaging effects if followed, researchers say
ECB paper presents new model for ‘fire sale’ contagion
Agent-based model shows asset managers spreading contagion during larger liquidity shocks
FOMC discusses communication ‘escape clauses’
Fed might need “leeway” to deal with financial instability, some FOMC members say
Bank of Russia to sell controlling stake in country’s biggest lender
Central bank will sell stake in Sberbank to finance ministry and is likely to pass most profits to state
Bank of Canada to take over calculation of reference rate
New methodology will make Corra more “robust, reliable and representative”, central bank says
Global property investors may undermine macro-pru – CGFS
House prices are rising and increasingly synchronised, BIS committee says
Bank of Korea stops handling overseas cash as coronavirus spreads
Central bank says it will not accept cash from abroad until further notice
Stability versus solvency
There is still far too much regulatory forbearance on troubled bank debt. More on-site inspections and genuine writedowns are needed to fix the banking system
Zimbabwean central bank optimistic but currency falls
Central bank fails to say whether debt repayments will be in US dollars or how long they will take
BoE’s Taylor argues for solution to IFRS 9 ‘headache’
Loss provisioning rules could worsen downturns and present issues for stress-testing, official says
PBoC loosens credit for province hit by coronavirus
New banknotes issued in bid to slow spread of disease, officials say
Climate-related disclosures should be mandatory – RBNZ official
Assistant governor says firms should not be allowed to “cherry pick” what disclosures they make