Financial Stability
Fed updating supervisory guidance on community banks
A deputy director tells subcommittee in House of Representatives the Fed has ‘several efforts underway’ to provide regulatory relief for community banks
Interview: Manuel Sánchez on shifting financial stability risks
Bank of Mexico deputy governor speaks about monetary policy normalisation in the US, the limits of macro-prudential tools and developing capital markets
Bank of Portugal ‘unprecedented’ decision over BES split questioned in lawsuit
Central bank’s decision to remove a loan from Oak Finance to BES from the ‘good bank’ created in the wake of its failure is challenged in court by New Zealand Superannuation Fund
Iranian governor floats plan for new IMF training centre
Valiollah Seif puts plan for new Iran-based IMF regional training centre to Christine Lagarde; says inflation outlook has improved since president Hassan Rouhani took office
Draghi says ECB may have to reassess Greek emergency liquidity
ECB president says situation in Greece may force governing council to revisit the terms of emergency liquidity, as another round of negotiations breaks down
Central Bank of Bahrain upgrading market infrastructure
Central Bank of Bahrain is upgrading market infrastructure and enhancing supervision of listed companies, announces governor Rasheed Al Maraj
Sarb expands risk management framework
The risk management framework of the South African Reserve Bank now includes policy risks and will soon include financial stability policy, reveals deputy governor
‘Severe’ risks around lifting capital controls, Icelandic report warns
Financial stability report highlights need for careful preparation before capital controls can be lifted; governor says most expected capital movements have been ‘well mapped out’
Legal questions force Swedish FSA to scrap amortisation rule
Financial Supervisory Authority suspends its plan to force households to pay down their mortgages over time in response to doubts over its mandate; Ingves says policy still needed
Sánchez encourages ‘realistic’ expectations of macro-prudential tools
Bank of Mexico deputy governor considers effectiveness of macro-prudential tools and the potential unintended consequences at Central Banking training series
Glenn Stevens flags capital market risks
RBA governor says the growing role of asset managers and lower market liquidity are cause for concern; combined with cross-border capital flows, this could trigger an abrupt sell-off
Fed’s Claessens challenges banking Balkanisation theories
Theories emphasising the collapse in cross-border credit since the financial crisis fail to capture a ‘secular trend’ towards emerging markets, says Fed senior adviser
Economists split on reality of cross-border co-operation
Panelists at an event in London see continued obstacles to countries working together effectively during a crisis, although regional co-operation could be a partial solution
Bank of Mexico lays out new rules for local derivatives
Interest rate swaps will have to be traded on electronic platforms and derivatives exchanges and transacted through clearing houses, according to new rules
Volcker proposes new regulatory structure with Federal Reserve at its heart
The Volcker Alliance sets out proposals for a new regulatory structure in the US that seeks to address the ‘fragmentation, overlaps and glaring gaps’ in the current system
Bank of Mexico paper warns of EM bond runs
Paper stresses vulnerability in face of Fed lift-off, even with low levels of leverage, noting mechanisms essentially unrelated to degree of leverage can determine financial stability
Greece raids local authorities for cash as repayments loom
Local authorities instructed to transfer cash balances to treasury accounts at the Bank of Greece; Constâncio says default would not ‘automatically’ push country out of the eurozone
Mexican deputy tells EMs to assume US rate hike coming ‘sooner rather than later’
Javier Guzmán Calafell advises emerging markets to prepare ‘as fast as possible for a worst-case scenario’ in anticipation of the Federal Reserve tightening policy later this year
Carstens-led IMFC urges policy-makers ‘to attenuate’ spillovers and spillbacks
Fund calls for ‘careful calibration’ of policy normalisation; endorses use of capital controls as a last resort
BoE challenged US Treasury on G-Sii status of Berkshire Hathaway
UK regulator asked for clarity on Berkshire's place in provisional list of systemically important firms
Caribbean countries should use fiscal policy to fight exchange market pressure
Report from economists of several Caribbean central banks lays out the path for fiscal sustainability in the region; recommends using exchange market pressure as trigger for fiscal correction
Constâncio fleshes out wider macro-prudential vision
Vice-president at the European Central Bank wants toolkit to extend to a wider range of financial entities, including asset managers, as risks emerge elsewhere in the system
Bank of Portugal was ‘overly cautious’ intervening in BES
A more assertive attitude from the Bank of Portugal could have resulted in the ‘possible mitigation of impacts’ arising from the BES case, finds parliamentary committee
Lagarde calls for ‘new multilateralism’ and pledges to move ahead on reform programme
Global policy agenda for coming year says the integration of key emerging market economies would ‘generate positive global spillovers and stability gains’