Financial Stability
A regulatory storm hits China
Regulators are making a country-wide push to tighten supervision, in an attempt to pull the Chinese economy away from shadow banking and excessive credit growth
Uncertainty over size of European ‘shadow banks’ – ESRB
Central banks are improving data collection, but many details remain unclear, report says
Balance sheet weakness and falling investment to blame for productivity slowdown – paper
IMF paper rejects structural hypothesis for slowdown in productivity growth following crisis; firms with balance sheet issues and those hit harder by credit tightening cut back on investment
Dombrovskis praises idea of bundling European sovereign bonds
European Commission is “closely following” work on designing new instruments
Financial integration will strengthen region – Thai governor
Santiprabhob says policies need to “converge” in order to create an integrated market; payment systems would be a good place to start with harmonised standards a proven solution, he says
MAS’s DLT project posts successful results
Network issues digital Singapore dollars across a DLT network to settle interbank debts; problems with credit risk and liquidity will be addressed in future work, central bank says
Model risk falls under the CCAR microscope
Fed using qualitative reviews to test the quality of model risk governance
European institutions agree vote on securitisation programme
Council of ministers and lawmakers will vote in the coming weeks
Growth in offshore funding is creating risks – RBNZ
Financial stability report notes growing reliance of banks on offshore funding sources could become a problem; housing market risks require new prudential tools
Sarb calls for comment on framework for deposit insurance scheme
Facility will provide cover of up to 100,000 rand in the event of a bank failure, with emergency liquidity from Sarb if necessary
Book notes: Crash Bang Wallop, by Iain Martin
A comprehensive study of the City of London and how it became the world’s leading financial centre prior to the financial crisis and the UK’s vote to leave the European Union
Spanish draft law would undermine financial reform, ECB says
Proposals on housing loan settlement would weaken “key pillar” of reform
Riksbank paper finds ‘significant’ gains from faster trading
Faster trading systems have eliminated arbitrage opportunities, improving market efficiency and quality, authors say
NPLs ‘must’ rise during downturns – MAS’s Menon
If NPLs failed to rise during “difficult times”, that would be a sign banks are not doing their job right, MAS chief says
MAS concludes 1MDB review with fresh fines
Credit Suisse and UOB fined $1.6 million collectively, with further individuals receiving lifetime bans
Bulgarian financial system still faces risks – IMF report
Financial safety net presents “important challenges”, despite reform efforts, IMF staff say
Israeli survey highlights benefits from ‘digital revolution’
“Tremendous changes” in the banking system are likely to benefit households and small businesses, the central bank says, while stability is also improving