Financial Stability
Online machine learning can warn of impending crisis – Hélène Rey
Approach avoids some of the pitfalls of other methods, the economics professor says
Fed’s repo market footprint goes back to zero
NY Fed has no outstanding repo interventions for first time in 10 months
Common asset holdings important for stress testing – BoE paper
When banks and non-banks hold the same assets, losses can be magnified, authors warn
Banks will be tested in next phase of pandemic – FSB chair
Reforms are needed to improve resolution planning and non-bank resilience, Randal Quarles says
Hélène Rey on macro-financial distortions and ‘phase 2’ of Covid-19
The LBS economics professor discusses monetary policy and financial exuberance, debt restructuring, and the use of machine learning to optimise ‘early-warning’ models to inform macro-prudential policy
UK’s ‘Big Four’ told to separate audit practices
Major shake-up of accounting firms comes in wake of the Wirecard scandal
Peter Praet on Europe’s Covid-19 responses
The former ECB chief economist talks about threats to financial stability, negative rates, common debt issuance and steps to improve the EMU
Yellen calls for ‘new Dodd-Frank’
Fed prevented financial crisis in March, says former chair, as Brainard backs calls for reform
How the Fed’s Covid stress test got stuck in the middle
Experts fear CCAR add-on has neither informed investors nor guided capital management
BoE issues deadline for firms’ climate risk plans
PRA says firms’ climate risk disclosures and scenario planning need major improvements
RBI supplies liquidity to Indian shadow banks ‘to avoid systemic risk’
Non-banking financial sector has faced major difficulties over last two years
UK firms must prepare for Brexit risks – FCA
EU and UK have yet to agree on equivalence, senior official warns
US living wills must include ‘lessons learned’ from Covid-19
Large banks must outline how crisis is impacting resolution planning capabilities, Fed and FDIC say
ECB stresses capital requirements won’t hamper bank mergers
Central bank launches consultation on new guidelines on banking sector consolidation
Fed’s safety nets are ‘fundamentally unsustainable’
The Fed’s new safety nets will allow “zombie companies” to thrive and drag down productivity; ever-increasing levels of interventions are “fundamentally unsustainable, intertemporally”, says William White
Dividends should be subject to macro-pru limits – ECB paper
Measure would reduce volatility in loan supply and equity levels, economist argues
Non-banks exposed to riskiest CLO tranches – Fed research
Risky holdings appear to be larger than market participants believe, economists say
Mobile payments banned in Zimbabwe
Central bank suspends mobile payment platforms following government circular
BIS warns of further shockwaves in ‘generation-defining’ crisis
Solvency crisis is looming on the horizon and health crisis is far from over, BIS officials say, as they present the 2020 annual report
Funds warm to Esma liquidity rules after Covid crisis
Funds are embracing stress-testing, and swing pricing, after “a real liquidity crisis” in March
IMF warns unprecedented central bank support may fuel instability
Investors may be too optimistic about recovery, IMF report says
Lebanon’s powerful central bank chief and its slide into crisis
Governor Salameh created unsustainable banking sector, former minister alleges in an interview
Fed finalises Volcker rule reform
Amendments permit banks to return to risky activity seen in 2008 financial crisis, Lael Brainard warns
FSB flags ‘gaps’ in too-big-to-fail reforms
Report highlights evidence reforms are working, but resolution remains imperfect and data limited