Liquidity
ECB paper tackles liquidity ‘free-rider’ problem
Working paper highlights ‘excessive liquidation’ caused by financial intermediaries free-riding on other firms’ liquidity holdings, but says macro-prudential policy can create ‘constrained efficiency’
Major central banks phase out dollar liquidity operations
ECB, BoE, BoJ and SNB will start scaling back the amount of dollar liquidity they offer to market participants in April in response to waning demand
Banks with more interbank relationships meet liquidity needs ‘more efficiently’, finds Bundesbank paper
Discussion paper examines the link between interbank relationships and liquidity needs, using data from German banks’ use of ECB main refinancing operations
PBoC delivers on cash injection promises
People’s Bank of China uses standing lending facility and reverse repos to inject in excess of $37 billion into interbank market; releases statement to prepare market participants ahead of time
Bank of England launches new liquidity provision framework
First ‘indexed long-term repo operations' under framework unveiled in October scheduled for early February; will provide ‘more liquidity at cheaper rates, longer maturities against wider range of collateral'
RBI director discusses management of 2013 capital outflows
High and unstable capital flows can lead to macro and financial stability concerns. But managing capital flows to minimise such concerns has costs too, says Deepak Mohanty
Commodity price inflation caused by 'financialisation', RBI paper finds
Research also shows private liquidity is inflationary while official liquidity is not and and that derivative traders, active and passive, have played an important role in inflation dynamics
Liquid liabilities to become more expensive as a result of Basel III, says RBA's Debelle
New liquidity rules will make liabilities with less than 30 days to maturity more costly for banks to provide, making it a more expensive liquidity service for customers to obtain, says RBA assistant governor
Rajan outlines medium-term 'pillars' for improving India's financial system
The five pillars comprise a 'clarified' monetary policy framework and a more liquid sovereign bond market; nation would 'benefit enormously' from the elimination of 'poorly targeted' subsidies
Link between ECB liquidity ops and interbank repo breaks down in crisis
Researchers at the New York Fed find that the relationship between ECB monetary policy operations and interbank borrowing did not survive the collapse of Lehman Brothers and associated crisis
China and India take divergent paths in liquidity management debate
People's Bank of China is targeting liquidity injections through a standing facility, while the Reserve Bank of India is reducing the amount available to banks through its equivalent funding window
Italian interbank market kept working through crisis
A study of interbank lending in Italy from 2007-2011 finds the hypothesis of liquidity hoarding in times of crisis did not apply in the instance examined
Asia Risk Congress: BIS points to Asian example as evidence new LCR not 'relaxed'
Asian regulators' partial recognition of Level 2B assets justifies revised Basel liquidity approach
Leading central banks make emergency swap lines permanent
Six leading central banks are leaving bilateral swap agreements introduced during the financial crisis in place until further notice; US dollar liquidity-providing operations will continue as normal
German researchers present indicator of interbank market stress
Bundesbank discussion paper says banks’ bidding behaviour in Eurosystem’s weekly refinancing operations reflect conditions in the interbank market
A new and explicit policy on liquidity provision
The Bank of England's new rules on liquidity provision reflect much closer regulation of banks' liquidity policies and a desire to avoid the mistakes of the crisis
Hedge funds caused post-Lehman liquidity crisis, research finds
Staff report from the New York Fed argues the evidence points to hedge funds, rather than dealers, precipitating the post-Lehman liquidity crisis - with implications for rules on prop trading
Fed targets tougher LCR for US banks
Federal Reserve proposes a liquidity coverage ratio for country’s largest financial institutions that goes above and beyond the Basel III minimums
Carney says BoE 'open for business' ahead of QE wind-down
Extra money for more types of collateral to be made available over longer tenors and at cheaper prices, in a bid to prepare UK banks for the end of QE; facilities could also be opened to non-banks
ECB's Cœuré backs committed liquidity facility
European Central Bank executive board member suggests a committed liquidity facility could help remove incentives for regulatory arbitrage in the Eurosystem
Constâncio and Issing fear ‘zombie' bank dependency on central bank liquidity
Former ECB chief economist joins current vice-president in warning over weak banks becoming dependent on central bank money - but Constâncio says ECB is ‘exiting quietly and smoothly'
ECB paper develops macro-pru tool probing impact of sudden capital outflows
Results show limited impact of a liquidity shock on banks' solvency ratios in the short term, but ‘moderate to high' effect on the supply of credit to the broader economy
Bank of England publishes banking primer to educate public
Article says role of prudential regulation is to ensure the soundness of banks by ensuring they have sufficient capital and liquidity to avoid disruption of critical services provided to the economy
BoJ paper: ‘Sudden stop' central factor in recent financial crises
Guillermo Calvo argues 'sudden stops' help explain a number of issues which conventional monetary policy fails adequately to address