Financial Stability
Paper looks at macro-prudential impact on mortgage affordability
Working paper assesses how macro-prudential policies influence the share of households that can “access and sustain” a mortgage at different loan-to-value ratios
Central American central banks move to upgrade regional payment system
Central bank governors from Central America draw up action plan, detailing faster payment times; Costa Rica to be fully integrated in ‘short space of time’
Wholesale funding shocks hit credit supply, paper finds
Shocks to securities and interbank lending markets have significant effects on banks’ supply of credit, an ECB paper finds; researchers use monthly loan data for eurozone banks
Greek governor calls for ‘bold and innovative’ action on non-performing loans
Greek economy should start a modest recovery in the second half of 2016, but the government must hit bailout programme targets and take bold action on non-performing loans, governor says
UK regulator wants banks to sell their stake in payments infrastructure
PSR says the ownership of infrastructure by a handful of banks damages competition and innovation; unveils a raft of proposals, including forcing banks to sell their interest in VocaLink
Germans have unexplained high cash preference – Bundesbank article
Germans have a much higher tendency to use cash for larger transactions, article in a first edition of a new Bundesbank publication says
UK will not ‘heal’ if pay and productivity remain ‘stuck’ – BoE deputy
Cunliffe optimistic inflation will return to target as disinflationary pressures fade, also keeping close eye on productivity
IMF urges ‘comprehensive approach’ to growth that reduces reliance on monetary policy
International Monetary Fund calls for coordinated policy response ahead of G20 meetings; policy-makers ‘must act now’ to implement strategies
Irish insurance firms face more scrutiny, supervisor says
Irish central bank’s director of insurance supervision outlines new regime; firms will have to provide more evidence to back up their claims
Sarb’s Lesetja Kganyago on divergent monetary policies and new supervision
The governor of the South African Reserve Bank talks to Christopher Jeffery about navigating divergent monetary policies, South Africa’s new supervisory regime and nurturing new talent
Lenders should reward low-risk customers – Kenyan governor
Banks should praise those performing well regarding credit management, and offer low-risk customers better terms as a result, governor says
EBA unveils 2016 stress test methodology
European Banking Authority presents the methodology for 2016 stress tests; no single capital adequacy level, but results will inform regulators’ assessments under SREP
Small and medium eurozone banks must assess business models, Lautenschläger says
Smaller financial institutions need to examine their business models in detail, eurozone regulator says; SSM wants harmonised treatment of institutional protection schemes
Bank of Mauritius seeks more clarity in payments law
Draft bill provides “comprehensive legislation” regarding the payment system in Mauritius, central bank says; outlines the bank’s authority on the regulation of the system
FSB looks to gauge risks around collateral reuse
Reusing collateral brings various benefits, but could also pose stability risks, report says; FSB outlines options for measures that could give supervisors a clearer picture of reuse patterns
IMF staff want better co-ordination between Kyrgyz government and central bank
Reforms are needed to strengthen the legal basis of the central bank and improve monetary policy traction in the country, staff say; better co-ordination is needed on government deposits
Tanzania launches financial education plan
More than 27% of people remain excluded from financial services in Tanzania; improved financial numeracy and risk management among issues to be addressed
Eurozone banks are taking more risks, Nouy says
Falling profitability of banks in the eurozone is pushing institutions into ‘into riskier territory’ and driving risk premia to historic lows, Nouy says; warns against ‘inappropriate cost-cutting’
ECB’s liquidity provision had ‘highly uneven effects’ on interbank markets, paper argues
ECB emergency liquidity provision had very different effects on stressed and non-stressed interbank lending markets; paper reconstructs interbank lending from Target2 database
RBA deputy sets out potential changes to interest rate benchmark
Debelle emphasises importance of the bank bill swap rate, outlines possible reforms including lengthening the window in which transactions are used to calculate rate
BoE officials grilled on weakening sterling
Members of the MPC ask whether the depreciation of the currency will cause the Bank of England to hike; Treasury Committee raises questions over EU referendum
Lagarde reappointed as IMF managing director
Christine Lagarde is formally reappointed to lead the International Monetary Fund; early tasks facing her include Greek debt agreement