Capital
Central banks could intervene on repo market function – BIS study
Markets still in a “state of transition” but some central banks might want to take action to mitigate adverse effects, CGFS report says
Lebanese banking sector holding up, despite Syria crisis – central bank
The banking sector remains liquid and well capitalised despite a “strained” Lebanese economy, the central bank says; new compliance unit formed
Congress urged to curb Fed’s regulatory powers
House hearing revives the debate on consolidating US regulatory agencies
Esma calls for greater powers over national supervisors
Supervisor also wants the authority to pause the application of some rules
Tarullo admits Volcker rule may be ‘too complicated’
Outgoing Fed governor says Volcker rule probably needs adjustment, though he warns against any measures that would weaken the capital regime
Fed paper searches for optimal bank capital
Study weighs higher cost of equity against the reduction in costly financial crises implied by higher capital, estimating an optimal figure
Basel Committee outlines enhanced disclosure framework
Revised Pillar 3 standard adds “dashboard” of banks’ key prudential metrics and consolidates all existing Basel Committee disclosure requirements
Bank and capital market financing not created equal – BIS paper
Substituting bank loans for non-bank finance after a shock appears to have a negative impact on the economy, authors find
Bank of England launches first ‘exploratory’ stress test
BoE will assess banks’ longer-term resilience to periods of stagnation; cyclical test made tougher
BoE’s FPC sounds warning on implementation of global standards
FPC cautions on global co-operation around regulatory standards; follows plans for deregulation in the US and tit-for-tat threat from German regulators
BoE research offers insights from new regulatory database
The new database, comprising banks’ regulatory submissions, allows authors to shed new light on the evolution of the UK banking sector in recent decades
Iceland lifts capital controls
Controls on individuals, firms and pension funds lifted, though the central bank will retain controls on inflows to resist carry trade
IMF paper offers new ways of measuring capital flow volatility
Authors say more granular dataset and three different methods of calculating capital flow volatility allow them to gain new insights
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”
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
Basel capital floors are necessary – Riksbank’s af Jochnick
Internal models have led to doubts over true capital adequacy, Riksbank deputy says, so floors have an important role to play
Basel set to decide on capital relief for accounting changes
Phase-in to IFRS 9 and Cecl needed to avert "a dramatic overnight drop in regulatory capital", say auditors
Basel III completion date pushed back
Governors and heads of supervision to delay meeting that would have given final approval to Basel III, as disagreement continues on output floors
Task force launches climate disclosure recommendations
Mark Carney says better information will allow investors to “back their convictions with their capital”; Mary Schapiro says businesses will take the lead, even if politicians will not
BIS paper identifies spillovers from targeted macro-prudential policies
Applying tools narrowly to a sector may nevertheless affect other sections of the financial system, authors find
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
Armenia saw turbulent H1 2016 – financial stability report
Geopolitical risks and growth slowdown led to a difficult environment for banks, although they still managed to boost capital and liquidity
Financial globalisation only good within limits, says Canada’s Lane
Timothy Lane flags the dangers of an open capital account for some countries, saying monetary policy in some countries may be “overwhelmed”
Market forces drive deleveraging as well as regulation – Caruana
BIS chief says markets are forcing discipline on banks, although he concedes regulation is playing a role as well; discussion participants point to tensions in regulatory framework