Europe
EBA says European banking supervision practices are converging but some areas lag
European banking supervisors achieved considerable cross-border convergence in some areas in 2015, but other fields retain differences, EBA report says
ECB paper explores capital-based macroprudential measures
Dampened credit and asset price growth can have a “sizable” impact on predicted crisis probabilities, authors note; they present an early warning global autoregressive model
Model-based regulation in Germany had unintended consequences, researchers say
The move to model-based banking regulation in Germany studied in working paper; loan default and loss rates rose for loans created under new regime
EBA survey: Most European banks did not see Brexit as risk
European banks anticipated increasing most kinds of loan activity, results of an EBA questionnaire show; few bankers saw ‘Brexit’ as a major source of risk
QE has mitigated trade shock to eurozone, ECB’s Praet says
ECB's easing has prevented trade shock from reducing eurozone growth rates, Peter Praet argues; "increasing evidence" that negative deposit rates improve QE’s pass-through
Irish paper proposes three-phase model of volatility in bond markets
Irish paper finds ‘good’, ‘bad’ and ‘ugly’ phases in eurozone sovereign debt markets from 2003 to 2014; crisis not caused by changes to the shock mechanism, but by pre-existing cross-country links
Dombrovskis replaces Hill in leading work on Capital Markets Union
Britain’s European finance commissioner resigns following referendum to be replaced by former Latvian PM; political timetable likely to delay further integration moves, analyst says
Europe’s regulatory challenges seen increasing in wake of ‘Brexit’
The UK’s possible departure from the European Union could intensify regulatory problems in region, one analyst says; Mifid and European Banking Authority may be key areas of concern
Eurozone investment still ‘unsatisfactory’, Draghi says
Mario Draghi calls for extension of European Investment plan and national reforms targeted at "bottlenecks"; eurozone investment still "unsatisfactory" despite recent gains, ECB president says
German Constitutional Court rules in favour of ECB programme
Germany’s Federal Constitutional Court rules ECB may undertake outright monetary transactions, but sets strict conditions to be monitored by the German government
ECB researchers add financial sectors to eurozone general equilibrium model
Modifications to general equilibrium model of eurozone allows proper modelling of domestic and cross-country effects of financial shocks, ECB researchers argue
Electronic payment system standards will be a 2016 priority, EBA says
Developing technical standards for European electronic payment systems will be a priority for 2016, the EBA says; authority will continue to work closely with ECB
Oil price falls may have negative effects on global economy, ECB warns
Falling oil prices may negatively affect global GDP growth and could threaten financial stability across emerging markets, ECB bulletin says; demand not supply now main pressure on prices
Micro factors affect Italian banks’ sovereign debt purchases, paper argues
Italian banks’ sovereign debt purchases strongly affected by their balance sheet needs, Bank of Italy researchers argue; size of bank a key factor
Weidmann: GDP-linked bonds an ‘avenue worth exploring’
Eurozone countries should explore merits of GDP-linked bonds, Bundesbank president argues; says move could help revision of sovereign risk weightings and cites Bank of England work
Draghi outlines structural reforms to boost EU productivity
Mario Draghi calls for European structural reforms to concentrate on improving human capital, creating properly functioning markets and tackling restraints on services
EU could go it alone on leverage ratio, says MEP
Swinburne says clearing should be shielded from ratio “if Basel does not deliver”
ECB papers take detailed look at bond market data
Two papers from the European Central Bank take a detailed look at data on the development of credit spreads in eurozone corporate bonds
Draghi policy announcement notable for its absences
ECB president announces slight upward revision in ECB's eurozone growth and inflation predictions, but does not unveil any new financing policies for Greece
Esma criticises European Commission plans for regulating NFCs
“Significant drawbacks” present in European Commission’s proposed approach to regulating non-financial corporations’ derivatives transactions, European Securities and Markets Authority argues
Eurobonds could be double-edged sword, researchers say
Banque de France researchers propose a new model of banks’ holdings of own-country sovereign debt; high holdings deter moral hazard but may exacerbate crises, they say
EBA reveals guidelines for first stress tests on deposit guarantee schemes
European deposit guarantee schemes must carry out stress tests including checks on member banks’ customer data, response to stressed conditions and cross-border co-operation
Further key decisions loom in Greek negotiations
Major decisions remain in negotiations over bail-out; IMF staff insist on cuts to primary surplus target that have met with opposition; ECB may restore eligibility of Greek bonds as collateral
Same factors can have different effects on bank risk profiles, ECB staff say
Factors that increase default risk for large and complex eurozone banks can decrease it for smaller banks, ECB staff say; results are based on new model of bank risk