Financial Stability
Summers fears for Fed’s ability to remove ‘punchbowl’
Central banks may not be able to counter inflation threat amid possible return to 1960s economics, says former US Treasury secretary
China’s financial market at risk of ‘distress’, RBA report warns
Authorities may have to choose between market discipline and intervention to save Evergrande
Cœuré warns ‘analogue’ supervisors must adapt to digital world
BIS official says growth of fintech demands supervisors respond with technology of their own
MAS says it is ‘examining’ allegations against local firm
Pandora Papers report alleges MAS was concerned by firm’s handling of Russian clients
Financial Stability Benchmarks 2021 report – keeping the sector secure
Benchmark exercise presents responses on AML/CFT, cyber, macro-prudential and other risks
CPMI and Iosco say systemic stablecoins must meet FMI principles
Stablecoins perform similar functions to other financial market infrastructures, say bodies
Evergrande tests China’s commitment to deleveraging
Chinese officials are having to choose between near-term growth and long-term economic health
Greater competition cut US banks’ ‘insider lending’ – BdF paper
Researchers quantify bank owners’ and executives’ loans to themselves and their interests
Most respondents externally accountable on financial stability
All responding central banks said they publish a financial stability report at least once a year
Financial stability powers are sufficient, say most central banks
Two African central banks say they urgently need more powers over financial sector
SSM reduced large eurozone banks’ risk-taking – ECB paper
Reduced credit risk was driven by supranational authority’s greater efficiency, authors argue
BoE report sheds light on Covid market operations
Surge in scale and frequency of operations amid switch to work from home created “issues”
Pandemic is top stability concern for benchmark respondents
House prices, cyber crime and crypto assets are also major worries for central banks
Larry Summers on stagflation risks, lessons from Delphi and never-ending ‘punch’
The former US Treasury secretary speaks about fiscal ‘overexpansion’, Fed/Treasury debt discord, the pitfalls of ‘unknown unknowns’ and central bankers ‘unable’ to remove the ‘punchbowl’
Many benchmark respondents concerned over AML/CFT risks
Participants based in Americas especially concerned over rise in money-laundering risks
Czech governor calls finance minister ‘incompetent’
Rusnok rejects finance minister’s criticisms of rate rise as general election draws near
Stark differences between financial stability department resources
Powers may be more important than staff numbers and budget to carry out function
More macro-pru tools needed, say some central banks
Some benchmark respondents say they lack legal framework for macro-prudential powers
Emerging market central banks regulate more sectors
A higher proportion are the sole banking, non-bank and micro-finance sector regulators
FSB relaunches global surveillance framework
New approach aims to be more systematic and reflect FSB’s “broad membership”
Afghan central bank ‘worsened crisis’, says leaked document
International officials allege “mismanagement” under Ahmady led to loss of dollars
Emerging nations favour different macro-prudential tools
Respondents from richer countries use counter-cyclical buffers more than emerging market peers
Many central banks are sole macro-pru agency
Two-thirds of respondents say central bank alone can impose macro-prudential restrictions
Singapore and Malaysia to link payment systems
Regulators see potential of using distributed ledger technology in cross-border payment linkage