Banks
Chile notes health of domestic economy has declined
Latest financial stability report highlights the lack of profitability in the banking sector; institutions’ ability to cope with adverse external scenarios has “diminished”
Yellen underlines the importance of education for the economy
Globalisation and technology are driving the demand for educated workers, Fed chair says, emphasising the important role education has to play in the evolving US economy
European agencies see pitfalls in growing big data use
Financial products likely to become more tailored to consumers, but that will not benefit everyone, regulators warn
Ukraine nationalises country’s largest bank
Gontareva says PrivatBank failed repeatedly to take necessary action, and so will be transferred into public ownership; central bank creates emergency liquidity facility
Sarb fines two major commercial banks for AML breaches
“Administrative sanctions” placed on Societe Generale Johannesburg branch and Absa Bank after staff found “weaknesses” in AML and terrorist-financing control measures
IMF paper shows US monetary conditions impact EM leverage
Impact is more pronounced for firms that are dependent on external financing, authors find; sample shows financial conditions have the ability to influence borrowing constraints
RBI paper unpacks India’s non-performing loan troubles
Authors find bank risk-taking is procyclical and the level of non-performing loans responds to the interest rate environment and the overall growth of the economy
IMF delay forces National Bank of Ukraine to keep forex controls
Central bank to leave foreign exchange controls in place until political instability subsides and reforms are under way; IMF acknowledges progress, but says more is needed before the third review
BoE’s Woods: firms favour ‘transitional’ Brexit period
Prudential Regulation Authority chief quizzed on best course of action for financial firms during Brexit process; “preferential” market access is not necessary, but seems sensible, he says
US agencies reject Wells Fargo resolution plan
Bank faces further curbs on its activities if it cannot present the Fed and FDIC with a sufficiently improved plan by early 2017
Eight banks struggle in Czech stress tests
Adverse scenario pushes many banks below regulatory capital minimums, though the system as a whole remains resilient, central bank says
Kganyago warns of ‘importing structural instability’
Sarb governor highlights impact of global banking regulation on South African economy, as Barclays prepares to pull out of the continent
BoE studies effects of capital requirements on balance sheets
After the financial crisis, banks placed more emphasis on asset deleveraging and adjusted their capital management practices
Central banks ‘critical’ in the development of blockchain
Large South African commercial bank examines what a central bank digital currency would look like, coining the phrase “sovereign blockchain”
IMF paper offers more granular stress testing framework
IMF applies new stress testing framework to Ecuador’s banking sector; framework offers more efficient surveillance, authors argue
SAMA governor outlines challenges facing Islamic banking sector
Unified accounting standards would “comfort” regulators and improve transparency for the industry, Alkholifey says; issues need to be addressed in order to foster growth in Islamic banking
Dombret paints gloomy picture of low rates’ impact on banks
Bundesbank board member spells out risks associated with low interest rate environment, noting banks are more likely to take risky assets onto their books the longer it prevails
BoE’s Hauser praises plan for integrated retail payments scheme
Faster Payments, Bacs and Cheque Clearing to be integrated into one system, Hauser says; ISO20022 to make interbank payments “much easier” for the UK
Ingves: internal modelling may create too much complexity
Basel Committee chair says complexity created by internal modelling has a range of adverse effects, though more research is needed
Should banks hold cocos or other kinds of buffers?
Richard Heckinger examines the merits of contingent convertible bonds vs other instruments for meeting regulatory requirements
Bank of Zambia closes fourth bank this quarter
Commercial bank deemed insolvent by the regulator; Bank of Zambia takes over control of the institution to “safeguard” depositors
RBS falls short in latest Bank of England stress tests
Three banks show signs of “capital inadequacies” in the latest round of tests, with RBS forced to review its capital plan; Carney says global and domestic risk remains “elevated”, prompting the FPC to leave its buffer unchanged
Impact of interest rate cap still unclear – Kenyan governor
There is not enough data on interest caps to influence the MPC’s decision, says Njoroge; interest rates remain on hold at 10%
Banks have still not fixed ‘poisonous mix’ of problems – BIS’s Borio
Claudio Borio warns that in some respects, banks have still not solved the problems revealed by the 2008 crisis, which leaves them vulnerable