Financial Stability
Jamaica establishes foreign exchange market working group
Governor Wynter calls meeting to inform market about new group, established to formulate proposals to address the depreciation of the Jamaican dollar
Credit scoring improves borrower selection, Bank of Italy paper says
Paper presents a database on loans and the use of credit-scoring models; banks’ use of credit scoring reduces the likelihood of borrower defaulting, researchers say
Ignazio Visco on Italian banks and why the ECB should not be made a ‘scapegoat’ for EMU fatigue
The Bank of Italy governor speaks to Chris Jeffery about resolving Italy’s NPLs, Europe’s bail-in framework, the importance of QE and why the ECB needs to stop being made a ‘scapegoat’ for EMU fatigue
Praet calls for further consolidation of eurozone banking
The ECB's chief economist says falling bank profits are not a concern for monetary policy and sector must improve business models while the central bank gives “regulatory clarity”
Sarb offers insight into its macro-prudential toolkit
Central bank begins to outline macro-prudential tools needed to enforce financial stability mandate, seeking comment on appropriate instruments
EBA suggests new model for prudential regulation of investment firms
Capital model should be based on firms’ risks to markets and to customers, EBA says
RBNZ’s Spencer sees need for better approach to FMI oversight
The framework, if put into legislation, would give the central bank and markets authority new powers of information-gathering and oversight
BoE sets final rules for bank loss-absorbency
Final rules for bail-inable debt adjusted for longer transition and lighter load on smaller banks
BoE’s Andrew Hauser says RTGS needs to move with the times
Executive director speaks on the risks and benefits of upgrading the UK’s core payments infrastructure; central bank is working on new technologies, including distributed ledgers
Vickers renews criticism of BoE systemic buffer
Blanket 3% buffer would better support ring-fencing, Vickers tells Tyrie
Brexit unlikely to spell end of London as a financial centre – BoE’s Cunliffe
“Clustering effects” should ensure London remains a major financial centre, says BoE deputy, though fragmentation poses a risk to activity throughout the EU
Cœuré sets out sovereign debt reform ideas as Weidmann strengthens call to end QE
Two senior eurozone central bankers set out different visions for radical change to the handling of European sovereign debt
Tuvalu eliminates foreign exchange restrictions
Tuvalu government repeals Exchange Control Act to adhere to IMF articles of agreement; move will help foster investment and international trade, fund says
Norges Bank deputy warns of vulnerabilities in financial system
“Sharp rise” in property prices and high household indebtedness are a concern, the latest financial stability report reveals; banking sector’s largest corporate exposure is to the real estate market
ECB’s economic bulletin paints mixed picture of eurozone investment
Business investment recovering overall but several factors may limit further growth, ECB says
Irish central bank levies record fine for AML and CFT breaches
Failures occurred over “extended period of time”, central bank says; case highlights need for controls over outsourcing of AML/CFT functions, says enforcement chief
Central clearing boosts welfare but margin matters – RBA paper
Study shows how central counterparties boost welfare by insuring against counterparty credit risk, but gains are sensitive to the level of margin
EBA recommends changing basis of resolution finance
“Crucial” that new measure reflect ability to call on funds in case of resolution crisis, EBA says; new measure should be based on total liabilities
Payments changing fast but cash still in demand – Riksbank survey
Telephone survey finds cash use declining and mobile payments on the rise, though demand for paper money not likely to disappear any time soon
Brexit may not lead to ‘new dominant location’ for European finance – Irish governor
Regulatory considerations should not drive firms’ location decisions, Lane argues
Obstacles may worsen for Russian and Turkish financial reformers, Italian paper says
Reforms in both countries left key problems unaddressed, researchers say
Ugandan governor emphasises banking system is sound
Tumusiime-Mutebile steps in to calm investors, dismissing negative reports following the acquisition of Crane Bank; banking system is “stable, sound and profitable”, he says
‘Overoptimism’ a factor in house price bubbles, Danish paper finds
Authors highlight how sentiment can become “decoupled” from economic fundamentals under certain circumstances
Banks not fully adapted to new prudential environment – BoE deputy
Firms need a “proper chance” to adapt to the “new world”, says Woods, warning that the banking system still looks fragile on some metrics, despite work by his predecessor, Andrew Bailey