Risk
Some large reserve managers eschew liquidity stress tests
Majority of central banks test for thin trading, but three in 10 larger managers do not
BIS paper explores changing inflation risk factors
Authors highlight “significant non-linearities” among a range of risk factors
Bank investors still don’t think bail-in will happen, FSB told
Questions over bailing in bank bondholders mean problem of too big to fail persists, experts warn
BoE officials fear long-term ‘scarring’ as uncertainty hits record high
MPC members broadly gloomy on the outlook, but there is “huge” uncertainty, says Andrew Bailey
Competition has varied impact on bank risk – BoE paper
Quantile regression gives more detailed picture than earlier studies, authors say
Knot warns deviations from global standards must be temporary
“If the US starts distancing itself from international standards, that is quite something,” says Dutch central bank chief
Bailey urges early intervention on stablecoin risks
BoE governor says multi-currency stablecoins do not appear to be viable payment systems at present
Alternative funds play key role in spreading shocks – study
Spillovers rose dramatically during Covid-19 stresses, authors find
Colombia cuts rates to record-low 2%
Below-target inflation allows new central bank action to boost growth
BoE open to heterodox tools in new research agenda
Traditional tools of economic analysis “cannot always answer every question”, says Andrew Bailey
Financial indicators can warn of European growth risks – ECB paper
Index that aggregates financial variables in non-linear way provides most information – researchers
James Bullard on the Fed’s policy review, FSOC and forecasting jobs data
St Louis Fed president discusses his support for average inflation targeting, his concerns about US Treasuries market function, non-bank regulatory weakness and negative rates, as well as the unexpected success in using Homebase data to predict highly…
Experiment finds bonus caps can reduce risk-taking
BoE paper says bonus caps can work, in contrast to earlier work by the central bank and comments by senior officials
Covid-19: a watershed moment for China’s BRI?
China faces a delicate balancing act when it comes to forgiving and restructuring Belt and Road Initiative debt while preserving the soundness of its financial institutions
Computing platforms for big data and AI
Implementing big-data and high-performance computing platforms is critical to support machine learning applications. Rafael Schmidt and Bruno Tissot offer insights on developing a comprehensive information strategy
Taiwan central bank open to more onshore insurer FX hedging
Central bank suggests lifers can use onshore swaps to hedge dividends, but some warn it could hit NDF market
BoE paper outlines ‘capital flows-at-risk’ framework
Methodology allows researchers to explore full distribution of “push” and “pull” effects on capital flows
Basel Committee drafts new resilience guidelines
BCBS consults banks on safeguards against operational risks such as pandemics and cyber attacks
BoE runs ‘reverse stress test’ to prepare for renewed Covid crisis
Banks may have to take drastic “defensive actions” if UK suffers another major shock, BoE says
CLS proposes second-tier FX settlement system
Stripped-back system for EM currencies mooted to tackle rising settlement risk
Flight to safety was not enough to fund credit line draws – Fed research
Many banks had to turn to non-deposit forms of borrowing, researchers find
Enria announces major change to ECB banking supervisor
SSM will have two new departments, and focus on banks’ business models, says Enria
IMF lifts limits on financial support facilities
Decision provoked debate among board members on whether fund should be taking additional risk
How vulnerable are EMEs to renewed Covid-19 turbulence?
Emerging markets face twin pressures from the health crisis and global financial forces, says Steve Kamin