Financial Stability
Working paper examines interactions between credit defaults and monetary policy
Countercyclical capital buffers can lessen macroeconomic fluctuations but increase the length of slumps, author argues; bank recapitalisation “overcomes this trade-off”
‘More market pressure’ on institutions to compete on safety, says RBNZ’s Fiennes
There is no government guarantee, says Fiennes; boards and managers are responsible for managing risks
Emerging evidence can guide design of macro-prudential policies, say BIS, IMF and FSB
International institutions present review of evidence on macro-prudential policies; no consensus but some patterns are emerging
IMF praises Argentina’s new statistical rigour
Fund pleased with progress made reforming statistics but there is still work to be done; IMF willing to provide “technical assistance”
Rajan tells regulators: do not be afraid of innovation
Regulators should not ban innovation in order to be safer, outgoing RBI governor says; innovation needs support to encourage its “appealing features”
FSB sees limited evidence of regulatory side-effects
Global financial reforms appear not to have had a significant impact on market liquidity or emerging markets, and have helped prevent the global system from fragmenting, authority says
Second half of global FX code to be circulated in October – Debelle
“Significant progress” has been made drafting the second phase, says RBA assistant governor; market participants will be able to comment on draft proposals and provide feedback
Nepal employing varied approaches to financial inclusion – governor
Bank has developed a number of models to make financial services affordable; other initiatives have included interest-free loans to those in rural areas
Ukrainian central bank complains of failure to prosecute banking offences
Deputy governor criticises failure to bring “high-profile” court cases against suspected financial criminals; IMF has yet to announce whether it will disburse next tranche of aid
US credit constraints heighten global propagation of financial shocks, researchers argue
Normal credit conditions in domestic US economy greatly lessen the global impact of American financial shocks, a European Central Bank paper argues
Basel Committee warns on potential missed deadlines
A “significant number” of Basel standards still need to be translated into domestic regulation as deadlines loom; problems with risk-weighted asset variability and inconsistency continue
Turkish central bank to conduct ‘extensive studies’ into inflation dynamics
Central Bank of Turkey on the hunt for price stability; bank looking to foster joint effort in improving structural factors
Financial inclusion in Rwanda rising, central bank report says
ATMs and mobile money has helped reduce the number of those financially excluded, governor says; banking sector starting to benefit but high proportion of NPLs in some sectors is a concern
FSB looks to halt correspondent banking decline
Board says it is working on filling data gaps, clarifying regulatory demands and building local capacity as signs point to a sharp decline in parts of the world
Inflation to fluctuate around bottom of target range, Botswanan report says
Mid-term review paints optimistic picture for inflation in Botswana; loose monetary conditions to contribute to growth in economic activity
Bank of Zambia begins liquidating three financial institutions
Commercial Leasing Zambia, Cetzam Financial Services and Genesis Finance to close with immediate effect; those affected have 30 days to file objection to the courts
Economic outcomes will “vindicate” central bank – Malawi governor
Chuka asks the private sector to “trust” the central bank in its policy decisions; a reduced debt-to-GDP ratio and an end to drought should see inflation fall, he says
Property prices closing in on pre-crisis levels – BIS statistics
Statistics for the first quarter show advanced economy prices approaching levels last seen before the financial crisis, but emerging markets see a dip; research links house prices to credit conditions
RBI launches bond market shake-up
Host of measures aim to develop markets, increase participation and improve liquidity in Indian capital markets, following review by former deputy governor Harun Khan
Capping interest rates could affect credit, says Kenyan president
Kenyan President approves new banking law despite acknowledging future “difficulties”; government to monitor possible emergence of “unregulated” and “informal” lending mechanisms
UBS teams up with other major banks in blockchain venture
‘Utility settlement coin’ to be backed by cash held at central banks; team of experts will keep an “open dialogue” with the banks and regulators throughout the testing process
Frontier markets need framework to strengthen capital flow resilience – IMF paper
Frontier markets are affected by capital flows in similar ways to emerging markets, the paper argues, suggesting a change in the “landscape” of capital flows could have policy implications
RBI’s Mundra hopes to boost credit to small businesses
Deputy governor outlines “ABCD” of issues affecting small businesses’ ability to access credit, including better access to information and new forms of collateral
Mervyn King on Brexit, crisis supervision, economic rebalancing and reforming the IMF
The former Bank of England governor discusses Brexit, radical regulatory reform, the difficulties rebalancing the European and global economies and an overhaul of the International Monetary Fund