Financial Stability
Volcker proposes new regulatory structure with Federal Reserve at its heart
The Volcker Alliance sets out proposals for a new regulatory structure in the US that seeks to address the ‘fragmentation, overlaps and glaring gaps’ in the current system
Bank of Mexico paper warns of EM bond runs
Paper stresses vulnerability in face of Fed lift-off, even with low levels of leverage, noting mechanisms essentially unrelated to degree of leverage can determine financial stability
Greece raids local authorities for cash as repayments loom
Local authorities instructed to transfer cash balances to treasury accounts at the Bank of Greece; Constâncio says default would not ‘automatically’ push country out of the eurozone
Mexican deputy tells EMs to assume US rate hike coming ‘sooner rather than later’
Javier Guzmán Calafell advises emerging markets to prepare ‘as fast as possible for a worst-case scenario’ in anticipation of the Federal Reserve tightening policy later this year
Carstens-led IMFC urges policy-makers ‘to attenuate’ spillovers and spillbacks
Fund calls for ‘careful calibration’ of policy normalisation; endorses use of capital controls as a last resort
BoE challenged US Treasury on G-Sii status of Berkshire Hathaway
UK regulator asked for clarity on Berkshire's place in provisional list of systemically important firms
Caribbean countries should use fiscal policy to fight exchange market pressure
Report from economists of several Caribbean central banks lays out the path for fiscal sustainability in the region; recommends using exchange market pressure as trigger for fiscal correction
Constâncio fleshes out wider macro-prudential vision
Vice-president at the European Central Bank wants toolkit to extend to a wider range of financial entities, including asset managers, as risks emerge elsewhere in the system
Bank of Portugal was ‘overly cautious’ intervening in BES
A more assertive attitude from the Bank of Portugal could have resulted in the ‘possible mitigation of impacts’ arising from the BES case, finds parliamentary committee
Lagarde calls for ‘new multilateralism’ and pledges to move ahead on reform programme
Global policy agenda for coming year says the integration of key emerging market economies would ‘generate positive global spillovers and stability gains’
IMF: China at risk of ‘disinflationary feedback loop'
Oversupply of real estate pushes down inflation, pressuring real interest rates and straining bloated balance sheets, Fund warns in flagship report
ECB adviser admits more clarity needed over stress tests
Banks should be given a clearer picture of why their stress test numbers don’t pass muster with the ECB, says Christoph Siebenbrunner of the Austrian National Bank
Financial stability risks on the rise, IMF warns
Global financial stability report warns risks have increased and ‘rotated’ in the past six months, with emerging markets now more vulnerable
RBNZ deputy calls for action on housing imbalances
Grant Spencer says changes to tax treatment of housing should be considered, while he identifies apartment development as the best prospect for boosting supply in the short term
Frob challenges ‘are not minor’ despite losing powers to SRM, says Restoy
Fernando Restoy outlines the latest activities at the Fund for Orderly Bank Restructuring, ahead of European reform that will strip the institution of most of its powers
Dutch paper finds public campaigns can boost debit card use
Working paper examines a campaign run in the Netherlands in 2007, finding it led to debit card use increasing by 2%; effects most prominent at early stage of campaign
IMF urges BCEAO to ‘closely follow’ macro-prudential risks
The Central Bank of West African States has increased the provision of liquidity to commercial banks, which in turn are buying more government debt, increasing risks to financial stability
Argentines ask central bank for higher-denomination banknotes
Argentine bankers’ associations urge the central bank to print higher-denomination banknotes, as ATMs filled with 100 peso notes struggle to meet public demand
Cœuré cautious over loss-absorbing capacities of CCPs
ECB executive board member say loss-absorbing capacities may prove sufficient if they are applied consistently, and stresses the need for careful approach if they are to be expanded
Mozambican central bank balances food import pressures with domestic industry concerns
Bank of Mozambique holds interest rates as it comes under pressure over the value of its currency; accused of artificially propping up the value of the metical
Colombian paper studies policy impact on ‘fragile’ banks
Combination of macro-prudential tools such as pro-cyclical capital requirements and monetary policy is “well suited” to containing the effects of a downturn, study finds
Finnish paper explains why bank runs are sometimes partial
Discussion paper published by the Bank of Finland explains why bank runs in a situation where deposits are back with a government guarantee sometimes remain partial
Bank of Portugal governor calls for a European monetary fund
Costa believes such an institution is the only way to ‘guarantee stability’ in Europe; ESM head Regling says current model has created ‘successful status quo’
Malaysia launches new payments system to boost online transactions
Malaysia’s central bank aims to simplify online payments with new ‘JomPAY’ platform, which has the goal of reaching 5,000 merchants by 2020 and reducing usage of cash and cheques