Financial Stability
Russian and Chinese central banks sign MoU
The governors of the Russian and Chinese central banks sign memorandum of understanding; will now be able to issue bonds in each other’s markets
Paper warns macro-prudential tools can have ‘blunt’ impact
Working paper sees potential for macro-prudential tools to have ‘aggregate’ impact, using ‘quantitative restriction’ deployed in Japan from 1970s onwards as an example
IMF reforms approved by US Congress
Christine Lagarde and the People’s Bank of China welcome the approval of the US Senate for quota and governance reforms at the IMF, agreed by the board in 2010
‘Step-in risk’ could become part of Basel framework
Basel Committee consults on the risks created by a bank intervening to support third parties, but reserves judgement on how to incorporate such risks into the Basel framework
NSFR should be introduced for all EU credit institutions, EBA says
A net stable funding ratio must be introduced for all EU credit institutions, broadly in line with Basel model, the EBA says; data suggests most EU banks are already compliant
National Bank of Austria tells banks not to slow reform pace
Financial stability report notes trend of improving capitalisation has slowed; urges banks to continue the reform process and avoid short-term growth at the expense of stability
Rohde says resolution offers ‘genuine alternative’ to granting emergency liquidity
With the ability to recover or resolve firms in an orderly fashion, the National Bank of Denmark finds itself with an alternative to granting emergency liquidity assistance, governor says
BoE’s FPC in line for powers over buy-to-let market
Government proposes handing central bank powers of direction over LTV and ICR limits for buy-to-let mortgages, over a year after the BoE first requested them
Colombian paper explores signals from FX interventions
Interventions in the foreign exchange market act as ‘signals’ to solve co-ordination failure, paper says, suggesting findings can help strategy
EBA guidelines limit European banks’ exposure to shadow banks
The European Banking Authority has published guidelines limiting the exposure of European Union financial institutions both to the shadow banking sector and to individual firms within it
Debelle highlights ‘rich potential’ in regulatory data
Regulatory reporting is still in its infancy, but already useful trends are starting to emerge, the RBA assistant governor says
BIS deputy warns all economies must manage ‘sudden floods’ of capital
Advanced economies face the same floods of capital as emerging markets, and may be hit by other spillovers that are not yet well understood, Luis Awazu Pereira da Silva says
European regulation of investment firms needs reform, says EBA report
Micro-prudential regulation of investment firms in the European Union does not take proper account of risk and varies widely between countries and firms, an EBA report argues
Draghi calls for action on non-performing loans
Eurozone countries need wide-ranging reform of their systems for dealing with non-performing loans to stimulate the supply of capital to business, Mario Draghi says
Bank of Israel challenges interim competition report
Governor Karnit Flug warns of ‘marked risk’ to economic stability from some proposed measures; central bank argues they may hinder competition, not promote it
Bank of Canada identifies ‘prolonged weakness’ in commodity prices as a key risk
Latest financial system review suggests the resulting stress would be ‘manageable’, although an additional ‘large and broad-based drop’ would pose a bigger problem
HBOS investigation reveals possible ‘loose rivet’ in UK regulation
Accounting standards and auditing may be a weak point that is only just starting to be addressed, according to MPs at a parliamentary committee hearing on the failure of HBOS
Italian deputy governor warns on hurdles to capital markets union
The senior deputy governor of the Bank of Italy says capital markets union is necessary for the European economy but faces considerable obstacles
Brazil private growth expectations slide further
Brazilian economy will contract by 3.62% this year with inflation breaching the 10% barrier, private institutions say
New Zealand economists stress-test dairy sector
An article published by the Reserve Bank of New Zealand finds banking system losses would still be ‘manageable’ under the worst-case scenario for milk prices and farm values