Financial crisis
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
Possible Fed appointments on the horizon
Treasury department official Randall Quarles and former Fed staffer Marvin Goodfriend believed to be on the shortlist; no date yet for appointment announcement
Book notes: Fed Up, by Danielle diMartino Booth
A “fascinating but annoying” account by a US Federal Reserve insider who openly criticises the culture of the US central bank and policy decisions made by the institution leading up to and following the financial crisis
More regulation ‘may not fix problematic conduct’, says Sarb’s Mminele
Deputy governor appeals to the entire financial market to challenge and realign current culture; “fundamental shift” needed in order to rebuild “trust deficit”
Balance sheet weakness and falling investment to blame for productivity slowdown – paper
IMF paper rejects structural hypothesis for slowdown in productivity growth following crisis; firms with balance sheet issues and those hit harder by credit tightening cut back on investment
Book notes: Crash Bang Wallop, by Iain Martin
A comprehensive study of the City of London and how it became the world’s leading financial centre prior to the financial crisis and the UK’s vote to leave the European Union
IMF’s Werner: Latin America must keep debt under control
Western hemisphere chief says there are some concerning signs on debt, although the risk of a systemic crisis is low; region well placed to weather Fed shock
Kohn worried about weight of expectations on Federal Reserve
The weight of expectations on the US Fed may be too high; the US is not as well placed as the UK to tackle another major crisis, says the former Fed vice-chair
US household debt surpasses pre-crisis peak
Household debt exceeds 2008 level for first time, driven in part by auto loans and student debt
Former Fed vice-chair Kohn on populism, top central bankers
Donald Kohn speaks to Christopher Jeffery about his fears for the Fed amid mounting populism, why he has few policy regrets and his experiences working with some of the world’s top central bankers
IMF paper sheds light on solvency and liquidity interactions
Neglecting the “solvency-liquidity nexus” could lead to mistakes in stress-testing models, authors warn
Bank Negara Malaysia to ramp up misconduct supervision, says Ibrahim
Shocking survey results shows 15% of respondents would act ‘unethically’ when not being monitored; new guidance principles and transparency framework to help, BNM governor says