Liquidity
IMF paper considers merits of macro-prudential liquidity buffer
Working paper asks whether such a buffer would be desirable, and how it might operate in practice; authors say it would complement other requirements including the LCR and NSFR
Bank of Korea paper examines global liquidity drivers
Researchers at central bank explore transmission of global liquidity shocks from advanced to emerging market economies; warns there is no ‘silver bullet’ response
Banque de France paper says asset purchases may struggle to anchor rates
Working paper suggests asset purchases could be a way to anchor interbank rates, but the policy faces a number of difficulties; absorbing excess liquidity another option
Australian banks look to stable deposits to meet LCR, says Debelle
Interest rates on more stable deposit products are rising as banks prepare for liquidity coverage ratio’s January deadline, says Reserve Bank of Australia assistant governor
Weak TLTRO demand increases pressure on ECB
Banks borrow €129.8 through ECB's second operation; pressure increases on governing council to launch new measures in January or March 2015
IMF praises Central Bank of Kuwait’s ‘proactive’ approach
Central bank is ‘proactive’ in its liquidity management and macro-prudential supervision, IMF report says; publishing more timely information on oil sector would be ‘useful’
BIS paper spots correlations in capital control effects
Study of emerging market capital controls finds bonds flow into other regional countries if one loosens its controls, but the effect is weak when countries tighten
Iceland introduces foreign currency funding rule based on Basel Committee's NSFR
Measure is intended to limit extent to which banks fund long-term lending in foreign currencies with unstable short-term funding; Three-year NSFR could be introduced in 2015
Liquidity surplus has minor effect on short-term interbank rates, Riksbank article finds
Larger liquidity surplus in Swedish banking system since 2007 linked to downward pressure on short-term interbank rates, but effect is minor as most is invested in Riksbank Certificates
CGFS pushes central banks to prepare market-making crisis measures
BIS committee warns of ‘bifurcated’ liquidity and suggests central banks prepare crisis measures to support market-making, including the potential for direct intervention in critical markets
PBoC sheds light on opaque liquidity measures
Central bank confirms injection of billions of renminbi via new ‘medium-term lending facility’ as part of efforts to offset weaker foreign exchange inflows
BIS paper finds liquidity regulation need not harm lending
Evidence from the UK implies banks reduced their interconnectedness, but did not cut lending to the real economy in response to tighter liquidity regulations in 2010
World's biggest banks $60bn closer to Basel III target
Internationally active banks $20bn short of Basel III target, compared with $80bn six months earlier, according to Basel Committee review
Final liquidity rules issued for biggest US banks
‘More stringent' liquidity coverage ratio will come into effect in January 2017; Fed adopts final rule on supplementary leverage ratio, asks for input on swap margin rules
Bundesbank paper explores liquidity shock transmission
Claudia Buch and Linda Goldberg summarise the findings of empirical studies conducted across 11 countries to explore liquidity risk transmission
Avinash Persaud calls on regulators to address ‘system-wide' risk mismatches; slams Solvency II
Forcing long-term institutions under Solvency II to behave like short-term ones will be the biggest contributor to systemic risk since Basel II, says Avinash Persaud in Central Banking journal
Central banks need significant discretion to make swap lines work, says ECB
The pricing, size and maturity of standing currency swap lines when activated need to be left to central bank discretion, ECB says in latest Monthly Bulletin; language is 'intentionally unspecific’
The challenges for central banks
Demands are being made for central banks to consider financial stability alongside price stability, as a key component of their monetary policy. But that is nothing new for central banks
IMF paper finds macro-prudential polices can help prevent liquidity traps
Researchers find that debt limits and insurance requirements can help prevent economic agents from accumulating excessive leverage and triggering liquidity traps
BoE scraps 170-year old weekly balance sheet ‘snapshot' to hide emergency liquidity
Bank of England to remove data on emergency liquidity provision from weekly statement, in a step away from full transparency in the interest of financial stability
'Intra-firm borrowing' reduces liquidity risk at 'global' US banks, say NY Fed staff
New York Fed staff report finds 'fundamental differences' between banks with and without foreign affiliates
Riksbank calls for separate LCR in local currency
Swedish central bank is wary of lenders' ‘extremely low' krona buffers; proposed change could be constrained by the size of Sweden's sovereign bond market, however
Ingves says responsibility for liquidity risk management lies with banks, not regulators
Basel Committee chairman says banks must develop controls to help them manage the liquidity risk that is inherent in their activities of maturity transformation
Central Bank of UAE opens first ever discount window
The Central Bank of the United Arab Emirates will introduce a standing liquidity facility next week, offering banks overnight loans at 100 basis points above official repo rate