Financial Stability
Ukrainian central bank crackdown on capital flows to Russia
Governor says coal blockade may force central bank to take emergency measures including re-imposing exchange controls
Alan Greenspan says gold standard would have reined in debt
Former Fed chair says US would not be so indebted if it was on the gold standard; gold is the “primary global currency”, Greenspan says
Booms spill over less than busts – Riksbank paper
Financial booms appear to affect the real economy less than busts, suggesting macro-prudential policies will outperform “leaning against the wind”
Irish deputy governor says Brexit will have negative impact on Ireland
Donnery says regulators must not allow “fragmented” supervisory system to emerge
RBI’s Acharya says India ‘urgently’ needs asset management company
New deputy governor says stressed assets must not be allowed to “fester”, sketching two possible designs for an asset management company
Mexico steps in to stabilise forex market
New derivatives contracts will be available to all credit institutions, with the first auction scheduled for March 6; a total of up to $20 billion will be allocated, central bank says
Europe must strengthen money-laundering controls – EU agencies
Firms fail to properly implement AML/CFT policies, two-thirds of European national regulators say
New legislation to grant BoE more power over payments infrastructure
BoE’s Bailey details consolidation of core retail payment infrastructure along with UK central bank’s new powers
New deposits backed by central bank money could solve public mistrust
New deposits backed by central bank reserves could address public fears about bank safety following the use of bail-in tools in the resolution of regional banks, argues Alessandro Roselli
Market discipline stems Level 3 asset manipulation – paper
Bank of England paper shows link between low capital ratios and Level 3 assets between 2008–2013, but market discipline moderates the impact from accounting discretion
Banks fear fresh burden from new EU branch supervision plan
EBA insists enhanced supervision of largest branches will not bring additional requirements
ECB’s Cœuré argues against protectionism
ECB board member says protectionist policies reduce overall growth potential; calls for a more “efficient, enduring and equitable” approach to globalisation
Tech-related mismeasurement not to blame for 2004 slowdown
Fast growth between 1995 and 2004 is the “anomaly”, the authors suggest; further productivity growth is expected when the potential of latest advancements is realised
Why the EU needs an asset management company
The European Banking Authority’s Piers Haben and Mario Quagliariello argue a well-designed asset management company should be a major part of efforts to clean up the European banking sector
Kuroda flags need for better network of emergency forex liquidity
Bank of Japan governor warns network of swap lines among major central banks may not be enough as systemic banks reach into a broader set of regions
Basel III has aided system stability, interbank models suggest
Model predicts future crashes will not be total wipeout
RBA’s Ellis: cross-country and micro-factors matter for housing
The assistant governor sees country-specific and micro-factors as important to understanding the diversity of outcomes in the housing market
ECB paper models causes of flash crashes
Informational asymmetry and thin participation can cause liquidity problems, paper argues
Only struggling banks cut lending to raise capital ratio – IMF paper
Study of Eastern Europe says banks' strategy matters when it comes to assessing the impact of Basel III; only banks with low profitability cut lending to meet requirements
Danish paper examines funding costs in stress test scenario
Banks unable to attract funding quickly in a liquidity crisis, author says; model underscores importance of incorporating funding costs into stress tests
RBNZ presses ahead with dashboard plan, despite bank concerns
Banks raise fears over the dashboard plan to publish disclosures on RBNZ website, but the central bank says it believes it can address all the concerns
Macro-prudential policy must move beyond core banking – BoE’s Brazier
Stressed firms may outwardly be resilient but collectively be “overwhelmed”, says BoE director, calling for collective work to understand “feedback loops”
Eurozone needs ‘hard laws’ for credible resolution, economist argues
“Soft law” arrangements can break down in crises, Schoenmaker says
Technology provider of the year (supervision): Vizor Software
Vizor Software has transitioned from a niche consultancy to a technology provider of choice for central banks in 30 countries, including Canada, the UK and Saudi Arabia