Financial Stability
Riksbank’s Skingsley says payments innovation needs balance
Central banks should use combination of “hands on” and “hands off” approaches, and strike a balance between innovation, stability and growth, deputy says
Policy tensions in China to become ‘more stark’ in 2017 – Menon
MAS head says China's authorities will have to use a fair amount of “policy dexterity” this year to deal with likely US rate rises and volatile international markets
BIS fails to find single cause of sterling ‘flash crash’
Report finds “numerous” factors which amplified the effects of the depreciation, including “inexperience staff” and “fragile” market conditions; lessons must be learned, BIS warns
Swift creates distributed ledger proof-of-concept
Swift, in conjunction with Hyperledger working group, will launch private distributed ledger network to help banks manage their cross-border payments
FSB finalises recommended action on asset management risks
Set of recommendations tackle liquidity, leverage, op risk and securities lending; work on globally systemic designations pushed back until 2019
Leveraged markets not a financial stability risk – Powell
Powell examines state of highly leveraged markets with eye to financial stability, judging they are not yet a problem
Carney admits Brexit is no longer UK’s biggest stability risk
Bank of England governor quizzed on importance of transitional arrangements for Brexit; external financial policy member defends forecasting, but admits “surprise” at the health of the economy
Defence and diversification key to fund success – HKMA deputy
Exchange fund is to continue diversifying into industries that can “counter” inflationary pressures, Yue says, as a challenging investment environment looks set to continue
BIS paper flags importance of “multi-layered” bank networks
Authors go beyond aggregate exposures to reveal “multiplex” interbank networks, which could allow more tailored policymaking
FMI transparency needs to improve, Chile deputy says
Central bank leading by example with regard to improved FMI transparency and governance; disclosure framework for central bank’s settlement system to be completed in 2017
RBI research arm tests blockchain for clearing, settlement
IDRBT releases white paper on the applications of blockchain, examining the benefits for the Indian financial sector; research group created proof-of-concept architecture to simulate clearing network
Central Bank of Philippines to improve surveillance – Tetangco
Philippines has “ample” policy space to respond to risks, governor says, but monetary policy will only be enacted to prevent inflation deviation
Completing reform agenda may not be enough – Caruana
BIS chief urges continuous effort to finish reforms, but says they need to be backed by policies that raise earning and debt-repayment capacities
Ex-Barclays trader pleads guilty in price-fixing conspiracy
Jason Katz, a former EMFX trader at Barclays and BNP Paribas, pleads guilty in New York
Colombian macro-pru measures have been effective, paper shows
Paper analyses the impact of macro-prudential measures on credit supply of banks; both reserve requirement and dynamic provisioning scheme have negative effect on credit growth
Bank of Portugal selects preferred buyer for ‘good bank’
Novo Banco sale process has met with difficulties; US firm Lone Star is named the best-placed bidder
Spanish deputy governor hints at need for European banking mergers
Restoy says supervisors should not promote specific integrations
Ukraine acts to cover ‘major shortfall’ in nationalised bank
NBU also tightens bond auction anonymity and announces restriction on use of cash to settle payments
UK competition authority raises concern on VocaLink sale
Sale of payments infrastructure provider to MasterCard could harm competition on ATMs, but unlikely to be a problem for wider payment systems, CMA finds
US card fraud higher than in countries with chip technology – Fed study
Study finds card transactions are on the rise but cheques still important; limited adoption of chip technology seems to be contributing to fraud
Senior ECB regulator calls for progress on deposit insurance
Unified deposit insurance plays “key role” in achieving “stable cross-border banking across the euro area”, Julie Dickson says
Basel III completion date pushed back
Governors and heads of supervision to delay meeting that would have given final approval to Basel III, as disagreement continues on output floors
Lars Rohde on negative rates, pegs, productivity and resolution
The National Bank of Denmark governor speaks to Christopher Jeffery about the productivity paradox, defending currency pegs, unexpected limits for negative rates and addressing too-big-to-fail
Chile notes health of domestic economy has declined
Latest financial stability report highlights the lack of profitability in the banking sector; institutions’ ability to cope with adverse external scenarios has “diminished”