Financial Stability
BoE paper proposes new sovereign debt instruments
Economists from the UK and Canadian central banks says that sovereign cocos and GDP-linked bonds could help reduce the likelihood of liquidity and solvency crises
Caruana flags evidence of ‘manifold’ QE spillovers
BIS general manager presents evidence of varied spillovers from advanced economies' monetary policy; says policy-makers should do more to take them into account
Brazil’s Tombini says ‘we still do not fully understand’ macro-prudential tools
Governor of the Central Bank of Brazil warns that limited understanding of new policies presents ‘significant communication challenges’ for central banks
Malaysia central bank opens office in Beijing
BNM's newly established presence reflects growing trade and financial ties with China; governor also reveals new renminbi liquidity facility and MoU to establish cross-border collateral arrangements
Emerging markets will 'suffer' as QE ends, say panellists
Guillermo Calvo, Vittorio Corbo and Maurice Obstfeld say emerging markets face a bumpy landing when Fed winds down QE, and some are better prepared than others
Bank of England points to growing concern over low rates
Market participants say the risks surrounding low interest rates are now the third biggest cause for concern in the UK financial system, behind sovereign risk and the prospect of an economic downturn
Belgian paper warns central bank policies could worsen financial shocks
Working paper studies optimal monetary policy configurations for price and financial stability in Eastern Europe; finds central banks may worsen credit shocks by taking action against them
OECD’s William White fears global economic system is still highly unstable
William White tells Christopher Jeffery he is wary of placing too much reliance on the ‘science’ of monetary or regulatory policy. He also believes the world economic system is still out of balance
BoE economists build model to assess CCP backstop
Bank of England financial stability paper presents a ‘top-down’ statistical model for assessing the risk CCPs are exposed to, and the likely adequacy of their default resources
Moody's says big US banks no longer ‘too big to fail'
Agency cuts ratings of four systemically important US banks, including Goldman Sachs and JP Morgan, as Dodd-Frank believed to reduce prospects of future government bailouts
ECB's Mersch touts securitisation of SME loans as way of boosting EU economy
Executive board member says second priority after assessing banks' balance sheets is to support lending to SMEs by strengthening capital markets
Banks respond differently to capital target deviations, ECB paper shows
Working paper finds banks tend to reshuffle risk-weighted assets or increase holdings when above Tier I ratio, but more inclined to increase equity levels when below target
Bank of Spain deputy on what banking union will mean for national lenders
Spanish banking system will not face more complex challenges than those posed in other jurisdictions, says Fernando Restroy; capital levels for sector as a whole will be above 10% by year's end
SEE region must face financial challenges together, says Macedonia deputy
Macedonia's financial system, like others in the region, has suffered thanks to international regulation leading local subsidiaries of European banks to deleverage in southeast Europe
Bundesbank warns on ‘moral hazard' from low interest rate environment
Bundesbank's latest annual financial stability report fears insurance companies and banks are losing out in the low interest rate environment; deputy says ‘primary law' must change for SRM to work
Leaning against the wind does more harm than good, warns Svensson
Former Riksbank deputy Lars Svensson argues higher interest rates to combat asset bubbles and financial instability have the opposite effect by raising the real debt burden of households
Bill Clinton says failure to reform OTC markets earlier was a "real mistake"
Speaking at Sifma AGM, former US president says OTC market should have been forced into collateralised regime before 2008 crisis
Spanish economist urges IMF to complete its ‘metamorphosis’
Bank of Spain economic study says the International Monetary Fund needs to test its new surveillance and lending policies before it can take its place as the ‘guarantor’ of the new economic order
IMF paper backs stress test ‘rules of thumb’
Researchers from the IMF and BIS say rough guides to the typical relationships between credit levels and bank solvency can be useful tools in bank stress tests
BoE chief cashier says renminbi clearing bank would be 'valuable addition' for UK
Chris Salmon says a renminbi clearing bank would be a valuable addition to the UK's financial infrastructure, though there are 'many opportunities and ways' to clear renminbi transactions
Basel Committee reveals data behind G-Sib designations
Bank for International Settlements publishes figures used to calculate systemic importance and the thresholds for ‘buckets’; FSB designates new bank a G-Sib and shuffles existing list