Banks
Seychelles governor underscores the challenges facing SMEs
Abel says they lack funding as well as non-financial support; central bank will work with commercial sector to come up with a strategy for SME lending
Loan-to-credit ratios affected stability of smaller German banks – paper
Bundesbank researchers look at data on “critical events” from 1995 to 2013
BIS authors spot structural break in bank financing
Research identifies turning point in how banks fund themselves around 2008, with greater reliance on branches and subsidiaries
RBNZ to rethink capital requirements
Review will reassess country’s approach to Basel III implementation, after Australia decides to bolster its banks’ capital to be “unquestionably strong”
BoE paper isolates loan supply impact of credit crunch
“Rich, tailor-made data set” informs study of how pre-crisis bank lending characteristics may have impacted post-crisis credit supply
MAS director calls for firms to promote good governance
As regulations shift towards strengthening culture at firms, there is only so much central banks can do, MAS’ Ngiap says; firms must put customers before profit
Danish central bank advocates specific cyber security testing
Survey shows only 50% of financial institutions specifically test their crisis response plans against cyber attacks; cyber security needs to be backed by senior management
Bank of Namibia takes over government-owned commercial bank
Bank of Namibia removes SME Bank’s chief executive after “suspicious investments” in South Africa; all banking services will continue to operate
Bank of Jamaica proposes ‘hybrid’ resolution framework
New “hybrid framework” proposed after FSB report showed gaps in current resolution processes; parties have until April 14 to comment
Interest rate effects weaker at low levels – Borio and Gambacorta
Supply of loans becomes less responsive to policy rate movements when interest rates are already very low, likely due to impact on bank profits, authors say
Caruana: financial globalisation is not over
BIS chief says “peak finance” has not arrived, despite signs of a slowdown in global banking activity; warns against inward-looking policy-making
Tax cuts affect bank leverage and liabilities – BIS paper
Tax cuts have different effects on different banks, authors find; better-capitalised banks increase their assets, while weaker ones clean up their balance sheets
BoE acts to tackle disparity in capital requirements
PRA plans measures it believes will boost competition and address adverse incentives generated by the standardised approach to calculating risk weights
Researchers dig further into ‘Lazarus’ cyber attacks
Latest effort to crack case of cyber criminals unearths “fairly sophisticated” mechanism to target banks and regulators, and less sophisticated efforts to mislead investigators
Booms spill over less than busts – Riksbank paper
Financial booms appear to affect the real economy less than busts, suggesting macro-prudential policies will outperform “leaning against the wind”
RBI’s Acharya says India ‘urgently’ needs asset management company
New deputy governor says stressed assets must not be allowed to “fester”, sketching two possible designs for an asset management company
New deposits backed by central bank money could solve public mistrust
New deposits backed by central bank reserves could address public fears about bank safety following the use of bail-in tools in the resolution of regional banks, argues Alessandro Roselli
Market discipline stems Level 3 asset manipulation – paper
Bank of England paper shows link between low capital ratios and Level 3 assets between 2008–2013, but market discipline moderates the impact from accounting discretion
IMF warns Bank of Mongolia against fiscal financing
Latest round of funding contingent on central bank making changes, mission chief says; support provided to help government deal with bond default, but fiscal changes must be made
Why the EU needs an asset management company
The European Banking Authority’s Piers Haben and Mario Quagliariello argue a well-designed asset management company should be a major part of efforts to clean up the European banking sector
IMF praises BCEAO’s latest policy actions
Latest round of measures will result in stronger banking sector, mission chief says; rejuvenation of interbank market will help monetary policy effectiveness
IMF paper examines bank lending in Saudi Arabia
Despite low oil prices, credit to the private sector “remained robust”, but an overreliance on banks financing the deficit needs to stop, author says
Only struggling banks cut lending to raise capital ratio – IMF paper
Study of Eastern Europe says banks' strategy matters when it comes to assessing the impact of Basel III; only banks with low profitability cut lending to meet requirements
Danish paper examines funding costs in stress test scenario
Banks unable to attract funding quickly in a liquidity crisis, author says; model underscores importance of incorporating funding costs into stress tests