Financial crisis
Post-crisis fiscal cuts boosted solvency without harming liquidity – DNB paper
Dutch paper uses yield spreads to analyse impact of consolidation announcements on investor perception of government solvency
Saudi Arabia’s Alkholifey on economic restructuring, reserves and cyber security
The Saudi Arabian Monetary Authority’s governor talks to Christopher Jeffery about the restructuring of the Saudi economy, the impact of low oil prices on reserves and anti-money laundering efforts
People: Tunisian governor resigns; EFSF appoints chairman
Governor Ayari quits after Tunisian prime minister initiated the process to replace him; EFSF picks new chairman; European Commission proposes new chief for Systemic Risk Board
RBA paper proposes new method of mapping the banking network
“Density-based” approach helps overcome shortcomings of other methods, authors say
Lacklustre recovery down to pre-crisis factors – research
San Francisco Fed article says weak recovery in the US due to long-running factors, and not the immediate impact of the global crisis
BoE’s Cunliffe sees liquidity risk in rise of investment funds
Investors have poured money into less liquid instruments at a time when market liquidity has been falling, warns the BoE deputy governor
US real GDP growth accelerating in 2018 – Atlanta Fed
The real-time index GDPNow forecasts an annualised expansion of 4% in the first quarter
Nordic and Baltic states reinforce regional financial co-ordination
Banks operating across the region require common macro-prudential measures
Interest rate risk could be seed of next crisis – economists
Financial markets may have underestimated the persistence of low rates, and regulations have amplified the threat, say Srichander Ramaswamy and Philip Turner
A dangerous unknown: interest rate risk in the financial system
Urgent action is needed to tackle the little-understood build-up of interest rate risk in the global financial system; macro-pru tools still inadequate to tackle the issue
Fed unveils 2018 stress tests for big banks
The severely adverse scenario would take the unemployment rate to 10% from 4.1%
Banks not necessarily more opaque than other firms – BIS paper
Study compares stock returns of those with insider knowledge against the wider market
BoE’s Brazier flags concerns about ‘stretched’ credit markets
BoE is simulating ‘liquidity mismatch’ in bond markets to ensure financial stability, says executive director; central bank has a ‘duty’ to adapt regulation
EBA to test banks’ resilience in adverse Brexit scenario
Stress tests offer glimpse of how a crisis related to UK’s withdrawal from the bloc might emerge
Ireland nominates Lane for ECB vice-presidency
Irish governor has a track record as academic economist and senior ESRB figure
Banks expand some lending following crises, research shows
While portfolio lending is restricted, banks expand some other forms of lending
Securities lending services provider of the year: Northern Trust
Official institutions praise the Chicago-based firm’s excellent coverage, operational smoothness and good returns
Obituary: William McDonough (1934–2018)
The former New York Fed president helped avert several crises during his time in office
Transparency: Central Bank of Ireland
The Irish central bank has made great progress in communicating in a candid and open manner with the people it serves
Spain’s de Guindos moves closer to ECB vice-presidency
Spain enjoys good relations with Germany, and lacks a top position in the EU
Central banks should not be underestimated – DTCC chief
Michael Bodson says central banks will always find a way to deal with crises, even without interest rates at their disposal; Hélène Rey says interconnectedness of system is a risk
Davos experts weigh risks of future crisis
High debt levels, a rise in real interest rates and China are on the agenda for the panellists, who believe another financial crisis is inevitable
Higher liquidity levels can reduce banks’ funding costs, research finds
Doubling the liquid asset ratio is found to reduce the costs of insurance against default by 24.4%
BIS paper: unconventional policies may have depressed natural rate
Economists find shifts in estimates of the natural rate co-move with unexpected changes in unconventional policy