Bank for International Settlements (BIS)
Basel Committee flags further issues with bank modelling
Second study of variation in credit risk modelling using internal ratings-based approach sheds further light on what is causing banks to calculate significantly different capital requirements
FRTB data standards seen as threat to emerging markets
Need for "real" prices will limit use of models, increasing capital burden
People: Georgian board approves new governor; T&T gets new board
Koba Gvenetadze clears penultimate hurdle to becoming National Bank of Georgia governor; six new directors join the Central Bank of Trinidad and Tobago; BIS names Alexandre Lamfalussy fellow
Currency networks shape global spillovers, BIS authors find
Authors make use of recently enhanced BIS data sets to map currency networks, studying how these affected the risk-taking channel of monetary policy during the ‘taper tantrum’
Rajan offers solution to global policy spillovers
RBI governor sketches rating system designed to hold central banks to account; frank discussion may be enough, he says, but tougher rules in the style of Bretton Woods are also an option
Basel disclosure proposals add ‘dashboard’ of risk metrics
Fresh proposals on Basel III disclosure aim to simplify comparison of banks’ prudential positions; banks will also have to disclose “benchmark” risk weights based on standardised approach
BIS paper: short-term interest rate may no longer be enough to set policy
Globalised debt markets, the falling long-term interest rate and dollar debt accumulation has altered every major aspect of the monetary transmission mechanism in emerging markets, authors say
Central banks running out of room amid turbulence, BIS warns
Confidence in central banks is “faltering” as policies prove impotent, while negative rates erode bank profitability and debt levels weigh on global growth
BIS paper models self-generating financial crises
Authors set out DSGE model where financial crises can be triggered either by an external shock or the endogenous generation of credit booms and busts
BIS paper examines impact of fiscal rules in Latin America
Authors note countries with rules with "wider coverage" and "supporting procedures" can be more stable; more widely, rules help them behave 'less procyclically'
Financial variables improve output gap estimates, BoE paper finds
Adding financial variables to estimates of the output gap can allow policy-makers to spot trouble on the horizon more easily, authors say
BIS data sheds light on complex shift in global liquidity
There are signs global liquidity might be going into reverse for emerging markets; digging into the data shows situation is more complicated than aggregate figures imply
Caruana marks out dangerous nexus between debt, oil and the US dollar
BIS chief points to interactions of dollar borrowing by emerging markets, US rate hikes and the oil price, as latest data suggests world may be balanced on the edge of a drop in global liquidity
BIS paper finds forecasters put too much faith in private information
‘Noisy information model’ of inflation forecasting implies forecasters put inefficient weightings on private information to differentiate themselves
BIS deputy: animal spirits need stability
Investors need certainty over long-term prospects for sustainable growth, so more short-term stimulus by central banks is likely to make the problem worse, Pereira da Silva says
BIS paper finds investors take simplistic approach to emerging market risks
Authors find investors seem to divide countries based not on fundamentals but on whether they are deemed an emerging market
BIS paper says trade finance impacts global spillovers
Working paper emphasises importance of including trade finance when modelling global shocks, finding variations in price stickiness are important
Revised Basel III better reflects bank risk, research finds
Study says 2013 capital rules more in line with actual risk, but can be easily gamed
BIS stats show further retreat in global banking flows
Falling claims on China drive bulk of overall reduction in cross-border claims, but pace of decline slows compared with previous quarter
Regulators need better grasp of electronic trading, BIS committee says
Rapid growth of electronic trading in fixed-income markets demands more sophisticated regulatory analysis, Markets Committee says; new risks may be developing
Basel Committee completes trading book review
Much-anticipated redesign of market risk framework seeks to capture risks the Basel accord failed to guard against in 2008; impact study implies median 27% increase in capital charges
Lifetime achievement award: Zeti Akhtar Aziz
Zeti has played a crucial role in efforts to modernise Malaysia’s financial system, and has worked tirelessly to promote Islamic finance, financial inclusion and South-east Asian integration.
RBI, BIS gain access to China interbank foreign exchange market
Second batch of official investors receive permission to trade FX spot and derivatives onshore; MAS and BoK also among the seven institutions
People: Patel reappointed RBI deputy; Kocherlakota moves to University of Rochester
RBI deputy Urjit Patel gets second three-year term; Narayana Kocherlakota takes up economics chair at University of Rochester; Canadian governor to head BIS’s consultative council for the Americas