Financial Stability
Negative rates one of many pressures on bank business models, Lautenschläger says
ECB supervisory board vice-chair says business models must cope with a range of challenges, of which low rates are just one; Nouy and Lautenschläger field questions following annual report
ECB’s Mersch provides update on infrastructure work
Yves Mersch says business requirements being gathered from market participants ahead of instant payments; highlights plans for review of harmonisation of collateralisation procedures
Nakaso considers how policy-makers could respond to low bank profitability
Bank of Japan deputy notes financial stability risks from monetary easing are low at present; considers how to respond to overheating or low profitability if necessary
Low profitability and NPLs remain top of the eurozone supervisory agenda
European Central Bank presents annual report for supervision, with major concerns including profitability and non-performing loans; supervisors are working closely with the single resolution board
Government approves final stage of Thai development plan
Bank of Thailand will promote electronic payments in latest phase of financial sector master plan; all phases to be completed by 2020
Global financial safety net relies on maintaining IMF resources – paper
Regional funding arrangements and credit swap lines have grown in importance in providing support in times of stress, but maintaining IMF funding remains key, paper says
BoE’s Forbes outlines new thinking on current account imbalances
Breaking current account into trade and financial components allows more detailed analysis of when a large imbalance is dangerous and what shocks could cause trouble
Vítor Constâncio calls for macro-prudential tools to reach beyond banks
Authorities should be granted wider powers over alternative investment funds and shadow banking sector, including margins and haircuts on derivatives and securities financing, Constâncio says
Fed QE drives portfolio rebalancing towards foreign assets, Brazil paper finds
Research analyses ‘comprehensive’ dataset for Brazilian capital flows and a smaller one for other EM economies
Rosengren eyes balance between bank resilience and loans
Boston Fed president tells New York conference that supervisors should encourage banks to maintain lending when striving to meet capital-to-asset ratios, but stress the need for quick recapitalisation
BoJ establishes working groups to consider how to make best use of BOJ-NET
Working group to look at ways to make effective use of settlement system; BOJ-NET to process more transactions across time zones
IMF will ‘take stock’ of capital flow policies
IMF may undertake further work on capital flow management and foreign exchange interventions if analysis highlights need for it; fund will also re-examine global safety net
Progress on resolution frameworks has slowed, FSB warns
Few jurisdictions have all the rules in place and legislative progress is slowing, Financial Stability Board says in its latest peer review of resolution regimes
Researchers propose adapted methodology to assess money market microstructure
The standard algorithm used to assess bilateral exposures in the interbank market needs adapting to make it robust to zero and negative interest rates, two economists argue
Bank of Russia unveils framework for insurance industry regulation
Russia’s central bank will monitor insurance companies for compliance with financial ratios and other indicators; has set up institute for risk management in insurance industry
Tests find New Zealand banks ‘robust’ to dairy stress
Stress tests conducted by the Reserve Bank of New Zealand in late 2015 find five largest lenders to dairy sector can withstand further drops in payout and land values
Bank of Japan ramps up efforts to prepare infrastructure for disaster
Central bank calls for examinations of business continuity plans, learning from the 2011 earthquake, in rare report on payments landscape; BOJ-NET extends operating time
Riksbank flags concerns over pace of development in payments
Tech development proceeding ‘too rapidly’, says central bank; evolution of payments could jeopardise access
Banks start to clean up balance sheets after RBI asset quality review
Efforts will enable flow of credit in the long term, deputy says; improving capital buffers and governance structures also beneficial
San Marino’s new central bank chief faces NPL challenge
Staff at IMF stress need for “comprehensive strategy” to clean up balance sheets in the banking sector; Wafik Grais takes office as chairman of the central bank after prolonged vacancy
PBoC and MAS extend $46bn swap line
Renewal of currency arrangement follows deepening of cross-border integration measures introduced last year