Financial crisis
IMF paper examines crisis indicators
Working paper assesses the effectiveness of various indicators in predicting financial crises; finds that leverage is ineffective and instead use of poor quality collateral is “critical link”
Central Bank of Cyprus supports bailout request
Central bank recognises need for European help to recapitalise Cypriot banks; commits to supporting efforts to finalise the bailout
EC staff to ‘step up’ work on Spanish banks assessment
Olli Rehn calls for staff to speed up assessment of Spanish banking sector; downgrade rumours swirl after official government request for financial assistance from the Eurogroup
IMF highlights problems with overreaction to financial crises
Working paper studies data on banking crises; finds that a strong macroeconomic response to a banking crisis may reduce incentive for banks to restructure
BoE paper studies impact of Lehman’s collapse on payments
Bank of England working paper studies the effect of the Lehman Brothers collapse on wholesale payment patterns; finds slower payments and increase in risk following the default
IMF paper assesses impact of financial sector size
Working paper examines the effect on growth of varying sizes of financial sectors; finds that above a certain threshold, financial sectors have a negative impact on growth
ECB paper models endogenous credit risk
Working paper discusses models of credit risk; authors argue that “feedback effects” have major implications for regulatory reform
Czech National Bank reports resilient financial system
Financial Stability Report finds Czech financial sector well prepared for unfavourable external developments; says growth likely to stagnate in 2012
UK ‘catching up’ on collateral eligibility, say CBP panellists
Central Banking ON AIR event sees discussion of central bank decisions to extend collateral eligibility; panellists stress diversification should be executed with care in non-crisis times
IMF paper builds dynamic model of systemic risk
Working paper develops dynamic model of risk based on combination of underlying risk factors; finds this provides better warning signals than models with non-dynamic thresholds
New Zealand’s McDermott emphasises inflation targeting success
Reserve Bank of New Zealand assistant governor highlights success of central bank’s inflation targeting policy; says there is still room for improvement
ECB’s Cœuré urges ‘revival’ of money markets
ECB policy-maker says money markets are “vital” to the financial system; discusses steps that should be taken to reduce risk concerns to restore activity
IMF paper examines changing bond demand
Working paper considers changes in investor demand for government bonds after the financial crisis; finds lower yields shift demand from foreign to domestic investors
IMF paper models wholesale funding impact on credit supply
Working paper looks at effect of bank wholesale funding during financial crisis; finds use of wholesale funds negatively impacted credit supply during the crisis
Fed’s Tarullo calls for prompt action to regulate shadow banking
Fed board member Daniel Tarullo sets out 'more or less immediate' steps that should be taken towards regulating the shadow banking sector
IMF paper develops model of systemic risk
Working paper studies asymmetric financial system response to shocks in individual institutions; finds negative bias towards shocks grows significantly with firm size
BoE’s Tucker discusses credit market lessons
Bank of England deputy governor Paul Tucker considers lessons learned from credit boom and bust; urges careful assessment of policies by monetary authorities
Bank of Spain deputy governor resigns
Francisco Javier Aríztegui resigns as Bank of Spain deputy governor; Fernando Restoy Lozano named as replacement
RBA governor positive about Australian economy
Glenn Stevens optimistic about Australian economy; warns however against attempts to “engineer a return to the boom”
BoE’s Haldane criticises financial models
Andrew Haldane argues that use of normal distributions in many financial models seriously underestimates risk
Bundesbank’s Braasch calls for creation of a ‘new financial architecture’
Senior Deutsche Bundesbank official calls for more debate on key characteristics needed for new global financial architecture; hits out at current knee-jerk policy approach
Bank of Canada paper estimates settlement balance demand
Working paper estimates aggregate demand for settlement balances; suggests that the central bank’s supply of $3 billion is reasonable
Czech National Bank shifts reserves away from euro
Annual report shows decision was taken to hold Australian dollars as part of foreign currency reserves; swapped part of euro holdings for the Australian currency
New York Fed report models herd behaviour
Fed staff report models financial market herding behaviour using NYSE transaction data; finds herding is “fairly pervasive” on some trading days