Financial Stability
Bank of Mauritius constantly ‘beefing up’ regulatory capacity, says governor
Post-financial crisis ‘awakening’ posed challenges for authorities, says Roi; updating regulatory and supervisory capacity is ‘never-ending’
ESRB unveils methodology for mapping shadow banks
ESRB presents report on European shadow banking and identifies major risks in sector; says major gaps in data still exist
Report sees progress following UK market review but job ‘far from done’
Implementation report notes good progress, suggests responsibility must now fall to market participants; authors note ‘Brexit’ may delay some reforms
Bank of Israel aims to boost construction credit with new regulation
Banking supervision department proposes reclassifying credit risk in wake of financial institution’s efforts to insure against it; suggests it would free up $2.6bn of finance
MAS adds cloud computing to guidelines on outsourcing risk management
Cloud services officially acknowledged in latest outsourcing guidelines as more financial institutions adopt the practice; despite improved security, banks should still be aware of the risks
UK MPs urge separation of Financial Conduct Authority functions
Parliamentary committee suggests enforcement is separated from the FCA in a report on HBOS failure; the authority says this would inhibit its ability to act as a regulator
Irish central bankers take first look at effectiveness of macroprudential housing policies
Ireland’s central bank publishes examination of its first full year of operating macroprudential measures affecting the housing market; compares data on borrowers subject and free from limits
Exposure to sovereign risk may limit banks’ ability to attract deposits – IMF paper
Research shows non-linear relationship between exposure to sovereign risk and deposit outflows; exposure negatively affected growth of consumer deposits 2006-2011
EBA lays out policy options to deal with NPLs
The European Banking Authority issues report on non-performing loans, calling for consideration of ‘bad banks’ and formations of databases on collateral assets such as real estate
Ratings agency fined €1.38 million by Esma for regulatory breaches
The European Securities and Markets Authority fines Fitch for improper discussions of information and mishandling timing of Slovenia’s sovereign downgrade
Do not let resilience foster complacency, Carney tells G20
In his capacity as FSB chair Mark Carney acknowledges financial system resilience in the face of stress, but emphasises need to finish implementing post-crisis reforms
Menon pledges tougher measures on AML controls in Singapore
Ravi Menon says central bank will conduct more intrusive probes of higher-risk institutions and take stronger actions where practices fall short; monetary policy likely on hold for 2016
Italian paper looks at effects of Basel leverage ratio on repo and refinancing
A move to higher leverage ratios by eurozone banks has not decreased their repo and refinancing activities, a Bank of Italy paper says
Irish central bank announces new protections for mortgage borrowers
Variable-rate housing loan borrowers must be informed of cheaper alternative mortgages and have rate rises explained to them by lenders
EBA publishes final draft of IRB assessment methodology
The EBA publishes the final draft standards by which European regulators will assess banks’ compliance with the rules on using internal models to judge capital adequacy
ECB paper compares ability of indicators to predict bond risk premia
Researchers assemble 132 macroeconomic indicators and compare their performance against financial measures as predictors of eurozone countries’ bond risk premia
BoE prize-winning research favours CCB over leaning against the wind
Authors from Lancaster University find credit spread-augmented Taylor rule damages welfare, while a recent BIS paper takes a different analytical approach
Draghi raises possibility of ‘public backstop’ for NPLs
Eurozone recovery is continuing with credit conditions and volumes increasing because of quantitative easing, Draghi says; backstop would be “very useful”, but require Commission support
South Korean governor calls for international swap line expansion
Lee Juyeol welcomes improvements in financial safety nets at both global and regional levels, but suggests more co-operation is needed to ensure they expand further
MasterCard strikes deal to acquire UK’s VocaLink
Agreement to gain controlling stake in retail payments firm will end ownership by major UK banks; regulator to discuss developments
MAS announces ‘firm regulatory actions’ against multiple banks
Monetary Authority of Singapore finds “control failings” at DBS, Standard Chartered and UBS as part of probe into 1MDB funds; US Department of Justice seeking to recover $1bn in assets
RBI deputy praises Indian payment and settlement systems
R Gandhi notes the ever-increasing volume handled by state-of-the-art systems, but stresses the need to ensure they are safe and “result in overall efficiencies”
Andrew Bailey wants well understood FCA mission
The Financial Conduct Authority has statutory objectives and publishes an annual business plan, but there is “not a lot in between”, he says; new chief wants to run the institution “effectively and tightly”
Slovenian bail-in was legal, ECJ rules
Decision to wipe out some subordinated debt before recapitalising Slovenian banks in 2013 was challenged, but court finds it is compatible with EU law