Financial crisis
Piecing together a financial theory of stagnation
Ideas presented at recent BIS annual meetings reveal an emerging framework that explains how the financial system may be dragging down the real economy; Hélène Rey was the latest to contribute
Quarles defends past views amid Senate grilling
Trump’s pick for Fed regulation chief says hindsight is a wonderful thing, as he defends actions around crisis; Quarles says the Fed can improve regulatory transparency
Paper proposes method to estimate network of exposures
Researcher draws on aggregate exposures and market data to build a more complete picture of the network of bank exposures
Jaime Caruana defends pre-crisis record as Bank of Spain governor
Former governor says ultimate responsibility was on the “deficient” management of the regional savings banks, which relaxed their lending standards
Fed would remove Wells Fargo board if ‘appropriate’, says Yellen
Fed chair asked why stricter penalties had not been imposed after bank opened millions of fake accounts; senator Warren says current system has created “bullet proof” executives
Trust key to interbank lending, study finds
'Social collateral' collapsed during 2008 crisis, finds Swiss National Bank paper
Zimbabwe’s bond notes are ‘exacerbating’ economic fragility, IMF says
Fund urges Zim authorities to restore credibility to currency regime as financial crisis shows no sign of abating
Book notes: The Tides of Capital, by Julia Leung
This “stimulating read” offers a unique perspective on how Asian countries have developed economically over the past 20 years. More interesting is Leung’s unintentional revelation that they still have a long way to go
Bundesbank’s Buch calls for three-pronged reform effort
Bundesbank vice-president says policymakers should tackle “excessive” risk-taking to prevent further financial crises; evaluating reform is key, says Buch
Bank of Uganda officials to head new deposit insurance fund
Team from the Bank of Uganda to lead the fund in the interim as it relaunches following its separation from the central bank
Bullard raises concerns about east coast dominance of the Fed
St Louis Fed president is not worried about the major shake-up of the board of governors; points to reducing the influence of the New York Fed on the FOMC
FSB says ‘significant work’ still needed on cross-border resolution
Work is progressing but major obstacles remain; FSB’s Elke König urges regulators not to lose “reform momentum”
Wholesale funding ‘dry-ups’ driven by bank quality, ESRB paper argues
Researchers use data on certificate of deposit market between 2008 and 2014
Monetary policy ‘significantly’ affects the trade balance – paper
IMF paper links the effects of monetary policy on trade and its impaired transmission following the financial crisis
Fischer cautions against complacency
Fed vice-chairman says it would be “foolish” for policymakers to think they have eliminated all risk; there are still areas where supervisors have “limited insight”, says Fischer
‘No evidence’ of criminality in BoE crisis auctions
Bank of England given all clear on question of whether financial crisis liquidity auctions were rigged; central bank has now corrected may of the issues with its liquidity framework
BIS urges policymakers to exploit ‘window of opportunity’
Financial cycles are getting close to turning in many economies and central banks and governments must make sure they are prepared, the BIS warns in its 2017 annual report
Book notes: Can We Avoid Another Financial Crisis?, by Steve Keen
Steve Keen challenges “mainstream” economic thinking in this concise book, hoping to shift the political debate on debt
Making the rules and breaking the mould (Allan Meltzer: 1928–2017)
John Taylor writes about the extraordinary life of a pioneering economist whose lifelong work defied traditional rules – but one who strongly advocated them for central banks
BIS paper: forces driving global liquidity are shifting
Paper examines factors behind changing patterns of global liquidity, finding improved prudential standards have cut volatility
Greek bailout funds approved but debt relief still contentious
IMF agrees “in principle” to new support for Greece, unlocking European funds, but parties still fail to reach accord on debt relief
Governance frameworks need to fill in for legislative gaps, says Trinidad’s Hilaire
Governor of Caribbean central bank says financial entities have to be willing to “police themselves” by encouraging a culture founded upon strong corporate governance
National Bank of Denmark warns banks on stress test results
Some systemic banks came close to breaching threshold requirements in latest round of stress tests, central bank says
US Treasury proposals seek to water down Basel III
Proposals include axing parts of liquidity rules, reducing the use of stress testing and the possibility of allowing banks to opt out of the Volcker rule