Europe
Stressed governments persuade banks to increase bond buying, paper finds
European governments under fiscal stress persuaded domestic banks to increase their holdings of sovereign debt, a paper from The Netherlands Bank finds
Macro-prudential policy must give guidance on how to deleverage, paper says
Different deleveraging methods have varying effects on the economy, ECB working paper finds; policy-makers must give banks concrete guidance on how they implement certain measures
European supervisors must improve consistency on capital requirements, Angeloni says
European regulators must take more consistent approach to capital requirements, Ignazio Angeloni says; authorities have to improve macro-prudential policy co-ordination
‘Substantial drawbacks’ remain in European supervisory colleges’ work, EBA says
European supervisory colleges still have ‘substantial’ drawbacks in key aspects of their work, despite making improvements in 2015, the European Banking Authority says
EBA unveils 2016 stress test methodology
European Banking Authority presents the methodology for 2016 stress tests; no single capital adequacy level, but results will inform regulators’ assessments under SREP
Eurozone banks are taking more risks, Nouy says
Falling profitability of banks in the eurozone is pushing institutions into ‘into riskier territory’ and driving risk premia to historic lows, Nouy says; warns against ‘inappropriate cost-cutting’
ECB’s liquidity provision had ‘highly uneven effects’ on interbank markets, paper argues
ECB emergency liquidity provision had very different effects on stressed and non-stressed interbank lending markets; paper reconstructs interbank lending from Target2 database
ECB costs and profits on the rise, annual accounts show
Net profit for the ECB rose in 2015 year on year due to higher gains from securities sales and more fees charged for supervisory activities; operating costs also rise due to staff increases
Strong action needed to tackle credit booms, research finds
Study of macro-prudential policy use in south-east Europe finds policies must be broad, powerful and carefully calibrated if they are to work
EBA sets out standards for weighing securitisation ratings
Institutions must take 'qualitative' approach to weighing credit agencies’ ratings of securities in the short term, EBA says; advocates move to 'quantitative' approach over longer term
‘No Basel IV’, Draghi tells European Parliament
Banks will not face significantly higher capital requirements, Mario Draghi tells the Econ committee; UK agreement with rest of EU should be “clear”
BoE’s Cunliffe wants more detailed timetable for European reforms
Bank of England deputy governor welcomes ambition and honesty of five president report, published in June; hopes to see more detail on dates in future
Draghi says ‘risk of side effects’ will not stand in ECB’s way
Mario Draghi says the European Central Bank will not be deterred by the ‘unintended consequences’ of its asset-purchase programme, ahead of a key March governing council decision
Some eurozone countries increasing ‘regulatory fragmentation’, Lautenschläger says
‘Regulatory fragmentation’ between eurozone nations’ banking supervision regimes is being increased in some cases, Sabine Lautenschläger argues
Chance to ‘review’ BRRD must be seized, says Visco
Italian governor criticises the application of the Bank Resolution and Recovery Directive (BRRD); the transition was too hasty and reform may be needed, he argues
Bank of Italy growth indicator ticks up
Italian central bank’s ‘timely’ index shows eurozone GDP growth continuing in December, with the indicator reaching triple its level of a year ago
Dutch paper explores price level dispersion
‘Idiosyncratic shocks’ have greater impact on price level dispersion within the eurozone than in the US, authors say
Cyprus on track to complete programme by March, finance minister tells MEPs
Cyprus will continue with fiscal discipline and market-orientated reforms once adjustment programme ends, finance minister tells European parliament; rejects ‘tax haven’ claims
Banque de France governor wants public reforms
France must cut its public debt and reform its labour market, says Francois Villeroy de Galhau; the governor also calls for new investment products
ECB’s Cœuré calls for new attitude to liquidity
Liquidity in the European banking system should not return to its pre-crisis levels, Benoît Cœuré tells a Davos audience; CMU offers chance to fix problems which caused crisis, he adds
Issing says eurozone status quo is in danger
Former ECB board member says Europe’s monetary union is still plagued by problems caused by absence of political integration, which could pull the eurozone apart
ECB will 'review and possibly reconsider’ stance in March
ECB policy rates and asset-purchase programme remain unchanged, but Draghi says council was ‘unanimous’ in agreeing it should announce March review
Monetary policy less effective than structural reform, Davos panellists argue
Structural reform is more effective than monetary or fiscal policy in current conditions, Axel Weber and Raghuram Rajan agree; Weber foresees four Fed rate rises but thinks markets disagree
ECB paper quantifies spillover from sovereign to corporate credit risk
Research studies direct spillover effects using credit default swaps and data on 226 firms from 15 European countries in aftermath of first Greek bail-out