Europe
Regulations gave eurozone banks incentives to downplay credit risks, paper argues
Bank of Slovenia paper analyses whether banks correctly assessed corporate borrowers’ creditworthiness before the financial crisis, and what incentives they faced
Paper outlines methods for creating country-specific banking crisis prediction models
Working paper tests models with country-specific and state-dependent parameters on a sample of 14 European countries; approach out-performs traditional early-warning models, researchers argue
EBA suggests anti-money laundering measures for virtual currencies
Major new legislation or amendments needed to regulate payments in virtual currency, EBA says; suggests changes to proposed extension of regulation and calls for deadline for implementation
Money market interactions can explain behaviour of interest rate spreads, researchers argue
Paper analyses the interplay of unsecured and collateralised money markets; information obtained “can explain behaviour of interest rate spreads”, authors say
ESRB recommends EU states reciprocate Estonian capital buffer
European Systemic Risk Board’s recommendation is only second time it has suggested regulators should reciprocally adopt a new macro-prudential measure
ECB begins gathering data on daily money-market transactions
ECB announces daily collection of data from four money-market segments; scheme gathers 35,000 transaction records per day
EBA calls for binding 3% minimum leverage ratios
Central counterparties and central securities depositories should be exempted from leverage ratio, EBA says, as it recommends binding pillar 1 requirement
ECB bulletin says institutional reform important for increasing resilience
Governing institutions in eurozone countries need reform, the ECB says; Finland’s institutions are among very best in OECD but those of Greece and Italy are close to worst
ECB data reveals changes in eurozone wage rigidity
ECB publishes its third survey of wage dynamics in the eurozone; it argues data is “crucial” to designing monetary and other macroeconomic policies
Italian banks feel more pressure from EBA stress-test results
Publication of the 2016 stress tests on European banks focuses attention on Italian banks in particular, but private sector recapitalisation plan takes some pressure off MPS
All eyes on Italy as EBA prepares to release stress test results
Portuguese, Austrian and German banks may also be the possible subjects of market attention after tonight's publication
Cœuré: central bankers must be mindful of possible ‘economic lower bound’
Negative interest rates in the eurozone have not reached an “economic lower bound”, Benoît Cœuré says; support from governments’ policies and commercial banks’ business models is needed
ESRB unveils methodology for mapping shadow banks
ESRB presents report on European shadow banking and identifies major risks in sector; says major gaps in data still exist
European banks’ structure helps drive dollar-denominated debt issuance – paper
Bank of Spain paper examines the most prolific dollar-denominated debt issuers among European banks, finding issuance is driven by range of factors, including desire to hedge
Malta’s deputy governor to remain in post, central bank confirms
Alfred Mifsud will continue as one of the Central Bank of Malta’s two deputy governors; allegations of corruption, denied by Mifsud, are ‘outside bank’s remit or competence’, spokesman says
Exposure to sovereign risk may limit banks’ ability to attract deposits – IMF paper
Research shows non-linear relationship between exposure to sovereign risk and deposit outflows; exposure negatively affected growth of consumer deposits 2006-2011
Chinese law doubts holding back RMB internationalisation – paper
A Bank of Italy occasional paper plots the development of renminbi trading in Europe; future development may be characterised by rapid advances followed by slower periods, authors say
EBA lays out policy options to deal with NPLs
The European Banking Authority issues report on non-performing loans, calling for consideration of ‘bad banks’ and formations of databases on collateral assets such as real estate
331,000 counterfeit notes withdrawn in H1 2016 – ECB
Figures show 80% of all the counterfeits were €20 and €50 notes; number of total counterfeits withdrawn in first half of 2016 lower year on year
EBA publishes final draft of IRB assessment methodology
The EBA publishes the final draft standards by which European regulators will assess banks’ compliance with the rules on using internal models to judge capital adequacy
ECB paper compares ability of indicators to predict bond risk premia
Researchers assemble 132 macroeconomic indicators and compare their performance against financial measures as predictors of eurozone countries’ bond risk premia
Draghi raises possibility of ‘public backstop’ for NPLs
Eurozone recovery is continuing with credit conditions and volumes increasing because of quantitative easing, Draghi says; backstop would be “very useful”, but require Commission support
FSB calls for more progress on risk-free reference rates
The FSB says authorities have made progress towards reforming reference rate methodologies, but says they must continue to develop alternatives to the existing main reference rates
EBA proposes new templates for AT1 issues
EBA releases draft templates for future issuance of Additional Tier 1 capital instruments, highlighting provisions it ‘would recommend avoiding’