Capital
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
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