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Largest banks $270bn below Basel III core capital limits
Basel Committee finds banks would have missed CET1 requirement under Basel III by $270 billion in June 2012; IMF’s Lagarde condemns ‘uneven implementation’ of rules
Eurozone rocked by Cypriot depositor haircut plan
Markets take a hit, peripheral bond yields rise and commentators raise fears of contagious bank runs as Cypriot parliament debates plans to take 6.75% haircut from ‘insured’ depositors
Fed pays $88bn in profits to US Treasury
Federal Reserve makes large profit on securities holdings in 2012; follows warnings from Ben Bernanke and Fed researchers that remittances are not likely to remain elevated
Central banks can help promote reference rate choice, says BIS report
Bank for International Settlements working group finds money market appetite for adopting overnight reference rate; says central banks can help promote transparency
Banque de France research proposes framework to address stress-test failings
Researchers use statistical tests for detection of outliers to characterise severity and duration of stressed periods; suggests length of shock depends on the initial variables
IMF paper says competition is a motive for forex intervention by emerging markets
Study examines activity of emerging market economies in foreign exchange markets; finds competitiveness can be a motivating factor
Icelandic paper finds country's response to banking crisis was optimal
Research by Central Bank of Iceland looks at various alternatives to Iceland’s handling of the 2008 banking collapse, but finds none yield better outcomes than the baseline scenario
BIS says fundamentals lagging behind market sentiment
Quarterly review identifies ‘renewed sense of optimism’ in financial markets; also sees move away from safe havens to riskier assets as central bank easing continues
People: Kuroda confirmed; Bulgarian deputy joins government
Haruhiko Kuroda will replace Masaaki Shirakawa at the BoJ after receiving approval from parliament; Bulgarian deputy joins finance ministry in temporary switch; and more
IMF urges ‘more forceful action’ to end Europe’s woes
Report on European financial stability says situation remains ‘tenuous’ in eurozone; calls on authorities to act fast to repair balance sheets and set up banking union
Central bankers split over whether 3% leverage ratio is enough
Majority of participants in CentralBanking.com poll support implementation of Basel III; readers divided over questions of raising leverage ratio
RBNZ’s McDermott backs simple forecasts over fan charts
Reserve Bank of New Zealand assistant governor says a simple policy projection can provide clarity to overall ‘forecast story’ and the relationships between different macroeconomic variables
BoE chief economist warns against inflation complacency
Bank of England’s Spencer Dale says he is concerned by ‘dangerous talk’ suggesting MPC should focus more on growth
Shirakawa examines ways for Japan to hit 2% inflation target
Bank of Japan governor says inflation will only be beneficial if it is driven by the right factors; says improved expectations are key to restoring Japan’s growth potential
IMF report issues call to action on worsening Palestinian economy
Palestinian, Israeli and international authorities must move fast to tackle liquidity crisis, unsustainable public finances and political uncertainty in the West Bank and Gaza, staff report warns
Nalm 2013: Delegates debate reigniting European ABS market
Participants at Central Banking event discuss mechanisms to get European financial markets off life support; particular focus on asset-backed securities
MAS’s Menon says Singapore is ready for shifting financial ‘centre of gravity’
Managing director says Singapore is well prepared to take advantage of a shift in finance towards Asia, with strong regulation and close links to the rest of the region
BoE research warns of coming financing problems for private equity firms
Quarterly bulletin article highlights problems on the horizon for private equity firms that over-leveraged before the financial crisis, as their debt comes to maturity under much tighter conditions
IMF attempts to sculpt better stress tests
Stress tests are ‘more art than science’ but can be improved and expanded, according to IMF study; cannot be standardised across countries
ECB’s Cœuré says financial fragmentation ‘remains high’
Executive board member Benoît Cœuré highlights evidence of receding fragmentation in the eurozone but warns overall level still too high
IMF research warns short-term fiscal consolidation pain could become more serious
Paper says short-term growth impact from fiscal tightening could be worsened if markets or policy-makers overreact; emphasises this does not mean budget cuts should be scrapped
Basel Committee will assess whether capital rules need simplifying
Stefan Ingves, chairman of the Basel Committee, says simplicity is "desirable" but it is too soon to judge whether capital rules are overly complex
Dutch central bank paper examines impact of capital controls on currency crises
Study finds lower capital controls reduce the probability of a currency crisis, particularly in advanced economies where there is greater institutional development
Bundesbank paper raises concerns over accuracy of systemic risk measures
Researchers find market-based systemic risk measures may give a façade of safety even as banks enter ‘major tail risks’