Banks
BIS’s Shin links dollar strength to global malaise
Head of research outlines how dollar strength affects leverage globally, causing deviations from covered interest parity and potentially impacting growth and trade
Carney faces grilling from parliament in wake of tenure decision
Regardless of Brexit timetable, BoE governor will leave on June 30, 2019; he warns firms could trigger plans to leave London in late 2017 if Brexit deal proves unsatisfactory
Kenya’s Imperial Bank saga continues with fresh court ruling
Sniping ensues as high court rules on Imperial Bank; central bank says it has acted within the law, while shareholders challenge its interpretation of the ruling
IMF paper seeks to quantify debt bias
Tax systems create “pervasive” debt bias, authors find, arguing for policy action before the problem worsens
Brexit unlikely to spell end of London as a financial centre – BoE’s Cunliffe
“Clustering effects” should ensure London remains a major financial centre, says BoE deputy, though fragmentation poses a risk to activity throughout the EU
Riksbank paper shows importance of modelling bank costs
Models should not assume financial intermediation is free, authors say, showing banks can reduce aggregate welfare in some cases
Ugandan governor emphasises banking system is sound
Tumusiime-Mutebile steps in to calm investors, dismissing negative reports following the acquisition of Crane Bank; banking system is “stable, sound and profitable”, he says
Banks not fully adapted to new prudential environment – BoE deputy
Firms need a “proper chance” to adapt to the “new world”, says Woods, warning that the banking system still looks fragile on some metrics, despite work by his predecessor, Andrew Bailey
Hedging demand can cause covered interest parity violations – BIS paper
US dollar forward hedging demand can cause covered interest parity to fail even when markets are calm, authors say, helping explain this post-2012 anomaly
Fed raising bar for BNY Mellon – Powell
Fed working with treasury to ensure “smooth transition” as BNY Mellon becomes sole provider of government securities; bank must remain “robust”, says Fed’s Powell
Andrew Bailey looks to reboot UK conduct regulator’s ‘mission’
New chief executive seeks to clarify approach after stumbles in past years, admitting global understanding of conduct regulation still at an early stage
Bank of Uganda takes control of large commercial bank
Ugandan central bank takes over the management of Crane Bank, the commercial bank; clarification issued over use of governor’s signature
‘Strong’ correlation between leverage and financial connectivity – paper
Irish paper shows interconnected banks experience 'sharper contractions' in lending when faced with a shock; findings could have consequences for Basel III
Sri Lanka sets up enforcement unit after insolvency failures
Central Bank of Sri Lanka sets up new enforcement branch after unsuccessful attempt to restructure four failing financial institutions; legal action to be taken against Entrust Securities
Book notes: Achieving financial stability and growth in Africa, edited by Stephany Griffith-Jones and Ricardo Gottschalk
John Chown praises this comprehensive review that studies the possibility of achieving ‘the impossible’ in low-income Africa – both growth and financial stability
Bank of Russia records decrease in fraudulent transactions
Central bank says decrease in cyber crime is a result of new centre for Cyber-Attack Monitoring and Response in the Financial Centre; official says Bank of Russia supports initiative for harsher punishment of cyber crime
Coen seeks to quell European fears on Basel III
European parliament members accuse Basel Committee of favouring US over European banks; William Coen says “Basel process” is transparent and not dominated by any one interest
State Bank of Pakistan spends $1.2 million on department move
Banking subsidiary to move five of its operations to the northern and central provinces; move will help “streamline” operations, spokesperson says
BoE investigates 6% plunge in sterling
Bank of England to investigate a 'flash crash' in sterling during overnight trading; traders believe it was not a ‘fat finger’ error
European Commissioner cautions US on TLAC rules
Dombrovskis says foreign banks should not be mistreated by Fed internal TLAC proposal
Low growth and low rates to hit financial stability, says IMF
Weak outlook is likely to feed into medium-term problems for financial stability, fund warns; Basel Committee may have to delay agreement on final framework
IMF: Central Bank of Iran should ‘streamline’ committee membership
IMF assessment warns of committees “dominated” by government agencies; fund stresses the central bank should limit membership to its senior officials and independent experts
EBA dashboard shows capital on the rise but NPLs remain a worry
Regulators’ quarterly risk assessment shows EU banks’ capital ratios have ‘slightly increased’, but loan portfolios remain an issue
BoE paper examines how US banks lend after hurricane shock
Local banks may play an “important role” in a geographically integrated banking system, paper says, despite their greater vulnerability to financial constraints