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
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’
BIS’s Caruana calls for ‘humble’ risk management
General manager says both risk managers and regulators must show an awareness of the limits of our understanding as the financial system and real economy grow ever more complex and intertwined
Irish central bank targets consumer-first culture
New report from the central bank reveals focus on culture within the financial industry; head of consumer protection tells Central Banking about the institution’s plans
Basel Committee issues enhanced disclosure standards
Revised standards aim to improve the comparability of banks’ risk-weighted assets, shedding light on internal model-based approaches
BoE’s Gracie expects cyber attacks to breach defences
Building an ‘impermeable perimeter’ is unrealistic; institutions would be wise to focus instead on quick identification and response to threats, says executive director for resolution
Basel Committee revamps approach to credit risk models
Separate consultations set out improvements to standardised credit risk modelling approaches and make proposals for a capital floor; seek to reduce use of external ratings
BIS quarterly review warns even high quality securitisations carry risks
Quarterly review article says even simple, transparent and high-quality securitisations create uncertainty, making estimating risks tricky, especially in mezzanine tranches
Basel Committee: US and EU capital rules still falling short
Basel Committee’s second assessment of compliance with Basel framework finds both EU and US are not complying in all areas, but both argue deviations are justified
EU insurance stress tests reveal industry vulnerability to ‘Japanification’
Firms are vulnerable to a prolonged low interest rate environment and asset shocks, stress tests run between April and July show
BoE paper says loan fair value techniques come with 'health warnings'
Researchers say it is unlikely that any one technique will capture all relevant aspects of valuation across all types of bank loans
BIS' William Coen on Basel III and preventing the next crisis
William Coen, the secretary-general of the Basel Committee, speaks about the banking industry’s response to Basel III, supervision versus regulation and preventing the next crisis.
Bank of Canada governor highlights need to ‘incorporate uncertainty' in decision-making
Stephen Poloz says central bank uses ‘ranges rather than points' in its inflation and growth forecasts; estimates neutral rate of interest to be between 3% and 4%
Failure to improve culture will be punished, say Dudley and Tarullo
Fed officials say banks that fail to improve culture will face regulatory sanctions, including the possibility of being ‘dramatically downsized and simplified’
Basel Committee toughens bank governance principles
Principles aim to instil stronger risk governance in banks, after FSB peer review identified room for improvement; focus on responsibility of boards and ‘three lines of defence’
BIS paper tackles redistributive effects of regulation
Working paper studies how regulation tips welfare in favour of the real economy or financial sector, and suggests how regulators might deliver a Pareto improvement
Basel Committee finds banks’ op risk frameworks lacking
Review finds systemically important banks have made ‘insufficient progress’ in implementing op risk principles; Committee outlines recalibrated versions of its op risk capital models
Dombret calls on German banks to ‘embrace new risk culture’
Bundesbank executive board member sets out four criteria for assessing the ‘soundness’ of banks’ risk culture, including the ‘tone from the top’
Focus on risk culture is ‘remaking’ the banking system
Patricia Jackson highlights ‘big shift’ in banking as firms implement more rigorous risk frameworks; BoE’s Andrew Bailey sets out the PRA’s approach
FSB warns of ‘increasing signs of complacency' in financial markets
Concerns about the mispricing of liquidity risks are also raised at plenary meeting in Cairns this week, but ‘core of financial system continues to strengthen'
Kohn says exit from unconventional monetary policies likely to be 'positive event' for UK
External member of Bank of England FPC says ‘most likely all will go well' but warns long period of low volatility may have led to mispricing of risk
CPMI report reviews the ‘growing involvement’ of non-banks in retail payments
Working group chaired by Reserve Bank of India’s Padmanabhan says the presence of non-banks in payments raises 'level playing field issues' for central banks to consider
Maltese banks see increase in non-performing loans
The domestic banks in Malta had to increase their provisioning levels further to respond to the credit risk, notes central bank
RBNZ deputy ‘very satisfied’ with risk management review
Geoff Bascand praises the Reserve Bank of New Zealand’s enterprise risk management framework, which he says is a ‘powerful tool’ that will drive innovation across the central bank