Capital
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
BoE searches for better data on macro-financial links
As part of efforts to crack the UK’s productivity puzzle, the BoE plans improved data-gathering, seeking insight into the impact of capital accumulation and access to finance
BIS’s Shin argues bank capital underpins both monetary policy and financial stability
Research sheds light on tension between bank shareholders and wider society, as high levels of capital support lending and therefore affect the real economy as well as the financial sector
Canadian banks could withstand shock from China, deputy governor suggests
Financial institutions have adequate capital liquidity to handle external pressures, Wilkins says; research suggests Canadian growth would decrease by 0.1% if Chinese growth fell by 1%
Coen looks to wider issues affecting bank resilience
Secretary general of Basel Committee highlights importance of corporate governance and culture, IT systems and stress tests for resilience and profitability
Basel Committee restricts bank options for internal modelling
Banks will no longer be able to use the internal ratings-based approach for certain portfolios, and will face restrictions in other areas, under proposed rules
BoE and Vickers clash on capital rules
Both central bank and ring-fencing committee chair claim to have recommended higher capital requirements than the other – but a look at the proposals suggests the differences are slim
China relaxes QFII limits amid calls for capital controls
FX regulator shortens ‘lock-up’ period, during which foreign investors must wait before repatriating funds, from one year to three months
Revised Basel III better reflects bank risk, research finds
Study says 2013 capital rules more in line with actual risk, but can be easily gamed
New bank business models could undermine stability, panellists warn
Panel including Mark Carney and Agustín Carstens raises concerns over the way regulation and low rates are forcing banks to adapt in unpredictable ways
National Bank of Austria tells banks not to slow reform pace
Financial stability report notes trend of improving capitalisation has slowed; urges banks to continue the reform process and avoid short-term growth at the expense of stability
BIS deputy warns all economies must manage ‘sudden floods’ of capital
Advanced economies face the same floods of capital as emerging markets, and may be hit by other spillovers that are not yet well understood, Luis Awazu Pereira da Silva says
Norges Bank paper proposes linking CCP risk management to capital charges
Author recommends stress tests of CCPs to gauge interconnectedness, and proposes higher capital charges for CCPs with weaker risk management
BoE plans capital framework redesign
The central bank hopes the realignment of capital requirements from individual banks to a system-wide buffer will simplify the framework and allow the FPC to respond to threats earlier
Banks should do more to meet Basel disclosures, EBA says
Many banks in the EBA sample are falling short of disclosure rules in the Capital Requirements Regulation, with institutions struggling in particular with reporting their modelling
EBA: European bank capital improving but concerns remain over profits and assets
European banks are improving their capital and leverage ratios but are suffering from low levels of profitability and problems with non-performing loans, transparency exercise finds
Basel Committee proposes lighter capital for ‘STC’ securitisations
Simple, transparent and comparable securitisations might not need as much regulatory capital as they do under the current framework, proposals suggest
Information content of capital flows affects exchange rate impact, SNB paper finds
Private information conveyed by different kinds of capital flows affects the impact on the exchange rate, a working paper published by the Swiss National Bank finds
Bullard offers alternatives to cutting reserve bank dividend
St Louis Fed president takes issue with congressional proposal to cut dividend paid to largest banks; suggests tying amount paid to benchmark rate instead or eliminating it completely
BoE unveils final plans for ring-fencing banks
Consultation sets out how bank holding companies should structure themselves to comply with legislation on ring-fencing, but a decision on extra capital buffers is yet to come
Blanchard and others look to reconcile theory of capital flows with practice
Revamp of Mundell-Fleming model helps explain apparently contradictory results, with important implications for policy-makers looking to respond to capital flows