Capital
BoE sets final rules for bank loss-absorbency
Final rules for bail-inable debt adjusted for longer transition and lighter load on smaller banks
Vickers renews criticism of BoE systemic buffer
Blanket 3% buffer would better support ring-fencing, Vickers tells Tyrie
EBA recommends tighter regulation of European banks’ ‘large exposures’
Report calls for stricter limits on bank exposure to single clients and cautions against premature application of “standardised approach” to large exposures
European Commissioner cautions US on TLAC rules
Dombrovskis says foreign banks should not be mistreated by Fed internal TLAC proposal
BIS research tests leverage ratio with adjusted DSGE model
Authors design a model with both leverage ratio and variable risk-weighted capital requirements, finding a range of benefits to constraining leverage
Carney: green finance could help reverse long-run rate decline
Bank of England governor says green finance has the potential to send capital where it is most needed, and help advanced economies escape the problem of falling equilibrium interest rates
Stress tests should consider wider range of resilience metrics – BoE article
Metrics including liquidity and funding resilience should be considered as stress tests become an important part of a central bank’s regulatory toolkit; current liquidity and funding stress scenarios are “less advanced”
Post-crisis banking regulations increase large firms’ funding advantage – paper
Banque de France working paper presents a large-scale DGSE model with large and small firms to analyse the impact of new banking regulations
BIS paper flags spillovers from bank dividends
Dividend payments create a channel through which one bank’s capital policy can affect the equity value and risk of default of others, giving capital the attributes of a public good
Basel Committee hits turbulence on approach to year-end deadline
Central banks and supervisors offer support to its year-end goal, but industry players and EU countries show growing concern over higher capital levels
Fed finalises rules for countercyclical capital buffer
US central bank promises it will only adjust the buffer gradually and will seek comment before doing so, after consultation flagged concerns
Proposal for calculating capital requirements for concentration risk
Working paper warns “inadequate reflection” on concentration risk can lead to banks holding too little capital; proposes technique for calculating appropriate levels
EBA proposes new templates for AT1 issues
EBA releases draft templates for future issuance of Additional Tier 1 capital instruments, highlighting provisions it ‘would recommend avoiding’
IMF staff propose additional reforms to Italian banking sector
Directors at the fund “commend” the Italian authorities for reforms so far, while staff suggest a range of additional measures to tackle issues around resolution and NPLs
Basel Committee scales back risk weights in revised securitisation standard
Tighter definition of what counts as a “simple, transparent and comparable” securitisation gives room to allow “modest” reduction in capital requirements, committee says
Sarb faces tough job amid ‘sobering’ outlook, IMF warns
Capital flows, sovereign rating and financial sector health form dangerous links, fund says, though South African authorities stress they have made preparations
Nigerian regulator overhauls management of major local bank
Nigeria’s central bank enforced a change of management in a domestically systemically important bank due to liquidity and capital adequacy concerns; finance veterans appointed to top roles
IMF paper points to short-term benefits of product market reforms
Authors find product market reforms can deliver benefits in short term as well as long, though effects may be curtailed where credit is constrained
Outflows during normalisation proportional to earlier inflows, paper warns
Working paper examines the effects unconventional monetary policies in advanced economies had on capital flows in emerging markets, and predict what is to come during normalisation
Trilemma, dilemma, and the PBoC's primer for the 'new normal'
Hui Feng argues the PBoC faces a dilemma not a trilemma – but the effort of balancing the two goals is painful all the same
Minneapolis Fed to explore resolution alternatives in TBTF initiative
Neel Kashkari adds alternative resolution mechanisms to the agenda as Minneapolis Fed looks for solutions to the too-big-to-fail problem; discusses outcomes from this month’s symposium
IMF will consider macro-prudential policies in capital flow ‘stock-take’
Lagarde sheds light on stocktaking exercise that will use Article IVs over past three years to assess how IMF’s guidance on “capital flow management” has worked in practice
John Taylor offers way out of downward interest rate spiral
Stanford University professor says a return to more “rule-like” policy-making could help bring easing cycle to an end, with the Fed playing a key role
World needs ‘less and better’ finance, Bundesbank board member says
Regulators must resist political pressure to water down implementation of reforms; Basel III must increase capital requirements for high-risk portfolios, Bundesbank executive board member says