Liquidity
Bank of Canada plans changes to operating framework
Changes would see Canadian central bank cut back on purchase of government bonds through primary market, while intervening less frequently in overnight market
BoJ’s Sato outlines efforts to reform repo market
Board member says Bank of Japan is seeking to improve repo market functioning with reforms targeted at transparency, stability, efficiency and globalisation
Constâncio suggests new shadow bank powers for Esma
ECB vice-president again underlines need for supervisors to take on new tools and responsibilities for tackling shadow banks, but suggests at least some may be wielded by other bodies
PBoC steps up support with reserve ratio cuts
People’s Bank of China cuts the ratio for the second time this year, with observers pointing to pressure on the monetary base from foreign exchange outflows as a motivating factor
Financial stability risks on the rise, IMF warns
Global financial stability report warns risks have increased and ‘rotated’ in the past six months, with emerging markets now more vulnerable
BoE calls for investigation into market liquidity risks
Financial policy committee concerned that investors assume liquidity will be available when they need it, despite recent fragility; BIS research highlights paradox in liquidity buffers
Hellwig and Wolf question efficacy of financial reforms
Martin Hellwig and Martin Wolf discuss flaws in financial reforms aimed at breaking the sovereign-bank linkage in book on country and political risk
Nalm Europe: Markets may be struggling to digest news, warns BoE’s Salmon
Liquidity droughts and high volatility seem to be increasingly common – not necessarily problems in themselves, but the threat of contagion is becoming a concern, BoE markets director says
Nalm Europe: Scope for improved risk modelling, says RBNZ’s Bascand
Central bank has already gone some way towards revamping its financial management but there is ‘scope to improve further’, deputy governor tells Central Banking conference in London
ESRB group wants treatment of sovereign debt reviewed
Report published by European Systemic Risk Board argues sovereign debt can no longer treated as risk-free, and outlines different ways the regulatory framework could be adapted
BIS paper says liquidity regulation should not replace lender of last resort function
Lender of last resort and liquidity regulations perform separate roles, and therefore one cannot replace the other, working paper says
Yellen sees ‘room for improvement’ on risk management
Fed chair says banks have strengthened their risk management, internal controls and governance, but more can be done and supervisors will be ‘watching closely’
Largest banks clear Basel hurdle for first time
Latest monitoring report finds large internationally active banks all now meet minimum capital requirements; EBA sees capital falling under full implementation of European requirements
Kazakh central bank expects to hit inflation target if oil averages $50 or $60
National Bank of Kazakhstan publishes two forecasts with different assumptions about oil price; plans to limit market volatility by expanding monetary instruments
BoE revamps market intelligence approach
New approach to include greater transparency and a new executive committee to oversee market intelligence, following concerns flagged by Grabiner Report
Greek governor calls for reform and coherent growth plan
Yannis Stournaras urges government to honour Greece’s commitments and reach a prompt agreement with its European partners, then focus on creating sustainable growth
More reforms needed to tackle CCP risks, warns IMF paper
Significant risks remain despite efforts to improve the resilience of central counterparties, IMF working paper warns; direct access to central bank facilities would help
Bank of Canada will only lend renminbi as ‘last resort’
The central bank’s financial markets chief says it is up to banks to manage their renminbi liquidity needs, including in ‘stressed circumstances’
PBoC report reveals extent of liquidity interventions
Quarterly monetary policy report reveals massive injections of liquidity to support the money supply as outward capital flows continue to accelerate
Carney: Expectations of Fed tightening could trigger ‘sharp adjustment’ in financial markets
FSB chairman says the ‘ongoing disconnect’ between risk-taking in financial markets and the real economy ‘poses the threat of sharp adjustments’
BoE’s Furse warns liquidity has become ‘more fragile’ in some markets
Post-crisis measures have increased bank resilience, but have also ‘altered the economic model’ for capital markets intermediation
BIS sees cross-border liquidity reverting to historical trend
Latest global liquidity indicators show low volatility combining with rapid cross-border credit growth; researchers challenge simple supply and demand theory of oil-price slump
ECB’s collateral move adds pressure to Greek negotiations
Decision to cease accepting some Greek debt as collateral two weeks earlier than necessary turns banks toward ELA and adds pressure to political negotiations
PBoC takes action against tighter liquidity
Cut in reserve requirements seen as effort to ease liquidity due to lunar new year and capital outflows, but may do little more than offset a growing shortage