Financial crisis
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
Lifetime achievement award: Perng Fai-nan
Pre-emptive financial reforms combined with flexible monetary and forex policies have enabled Taiwan’s veteran governor to provide economic stability, even during turbulent times
BoE commits to improving liquidity facilities
Report says central bank could do more to ensure smooth operations
Financial regulations have been procyclical historically – research
Regulations tend to weaken during economic booms and strengthen with crisis
Short-selling bans increased instability – ESRB paper
Banks’ volatility, leverage and default probability increased by bans on short-selling – researchers
German coalition talks open possibility of reformed ESM
European Commission proposed creating a new institution to lead crisis programmes in December
Central banks lack ‘firepower’ to combat financial crises, says report
Without interest rate cuts available, the next financial crisis could be much “longer and deeper”, Global Risk Report says
Auditors find ‘flaws’ in ECB’s crisis management framework
ECB must improve co-ordination with SRB and national supervisors – report
German savings banks may buy debt to gain political favour, ECB paper says
Research warns this behaviour increases interdependence between banks and governments
Economists need to better understand macrofinancial links – BIS paper
Stijn Claessens and Ayhan Kose call for “new generation of models” among other research to solve ongoing puzzles
Minneapolis Fed launches too-big-to-fail plan
The four-step plan proposes stricter capitalisation rules for big banks and looser regulation for smaller institutions
IMF’s Obstfeld: effects of accommodative policy remain unclear
The IMF chief economist weighs up the productivity puzzle and whether monetary policy helped or hindered growth following the financial crisis
Fed could use rates to counter instability – Mester
2015 exercise showed major problems in use of macro-prudential tools, says Cleveland Fed chief
‘Decisive’ action needed to deflate China’s credit boom – IMF paper
Lack of reliance on foreign financing, low government debt, and state control help to mitigate effects of credit boom, but buffers should not be relied upon in the long run