News/Financial Stability
ECB calls for return to stricter growth and stability pact
European Central Bank calls for reversion of Stability and Growth Pact 2005 amendments, which relaxed compliance conditions; says sanctions on member states should be applied more stringently
G20 leaders pinpoint indicators for global imbalance guidelines
G20 central bankers, finance minister set out indicators to be used in assessing imbalances
FSB outlines progress on national resolution regimes
Financial Stability Board says work on building framework for national resolution regimes well under way; loss absorbency measures for global sifis on schedule
Bahraini bankers criticised central bank in lead-up to crisis: WikiLeak
WikiLeak alleges some economists and bankers dissatisfied with Central Bank of Bahrain's slow reaction to real-estate sector problems
Bundesbank slams idea of using ESM to buy government debt
Bundesbank says using enlarged European Stability Mechanism to buy government bonds of troubled countries will place more burden on taxpayers
Basel alone will not protect us: UK Treasury Committee’s Tyrie
UK Treasury Select Committee chair Andrew Tyrie says fundamental changes to the way banks are supervised a must; tripartite system left no one in charge
Beijing downplays hot money flows
China’s State Administration of Foreign Exchange says hot money flows are “ant-like” relative to size of economy; analysts say results downplay risks of emerging markets overheating
Zhou and Carstens new co-heads of IIF crisis prevention group
People’s Bank of China governor Zhou Xiaochuan and Bank of Mexico governor Agustín Carstens to co-head Group of Trustees at Institute of International Finance working group
UK Treasury fleshes out new regulatory set-up
UK Treasury details powers of the new macroprudential body; rebrands Consumer Protection and Markets Authority to reflect underlying purpose
ECB overnight lending rockets to 19-month high
Banks’ borrowing from the European Central Bank’s marginal lending facility climbs to $21 billion on Wednesday; sudden move has sparked speculation on bank troubles, analysts say
Fed’s Kohn appointed to Bank’s FPC
UK government names four external members to interim Financial Policy Committee; former Fed vice-chair Donald Kohn among three ex-central bankers appointed to macroprudential body
Draghi strikes familiar chord on eurozone’s future
Bank of Italy governor Mario Draghi stresses importance of fiscal discipline, says monetary union is sound
HKMA plans launch of new HK$500 note
Hong Kong Monetary Authority says banknote will enter circulation next week
Basel surveys literature on links between finance and real economy
Basel Committee on Banking Supervision’s Research Task Force identifies three transmission channels between financial sector and real economy
Fed’s Tarullo outlines OTC derivatives reform agenda
Federal Reserve governor Daniel Tarullo stresses importance of central counterparties, close scrutiny of market participants
Spanish banks’ ECB reliance drops
Spanish banks’ borrowing from European Central Bank declines just over 20% compared to December
Bond purchase frictions convinced Weber to drop out of ECB race
Bundesbank's Axel Weber says divergent views on ECB’s bond purchases meant he was no longer an acceptable candidate to succeed Trichet; stresses he was right to stick to his guns
IMF guilty of ‘group think’, says Fund watchdog
Independent Evaluation Office says IMF’s cohesiveness in period leading up to the financial crisis prevented fund from spotting impending risks
SEC moves to cut ratings out of registration requirements
US Securities and Exchange Commission proposes rule striking investment-grade rating condition from short-form registration process for companies issuing securities; move mandated by Dodd-Frank
Israel’s Fischer calls for international FX rules
Bank of Israel governor Stanley Fischer calls on IMF to draw up set of international rules on foreign exchange intervention
Bank’s inflation argument ‘fanciful’: ex-MPC’s Julius
Former Bank of England rate-setter DeAnne Julius says inflation expectations risk becoming unmoored; monetary policy acting for financial stability, ex rate-setter Tim Besley adds
Southern Sudan should adopt currency board: IMF mission chief
Fund’s Sudan mission chief Edward Gemayel says simplicity of currency board system advantageous for soon-to-be country; South preparing to adopt new currency
Fed wants right to choose which nonbanks pose systemic threat
Federal Reserve rule proposes that it will have discretion to determine whether nonbank financial firms come under Financial Stability Oversight Council’s watch on case-by-case basis
Spain should consider regulatory overhaul: FSB peer review
Financial Stability Board peer review calls for Spanish authorities to consider new regulatory structure once market turmoil has subsided; separate review of Italy also published