Financial Stability
Lithuanian governor lays out economic priorities for Council of EU
Vitas Vasiliauskas says European policy-makers have proven they are ‘ambitious architects’ but must now demonstrate they are ‘good constructors’
Finance sector balance sheets vital for monetary policy transmission, IMF paper shows
Balance sheet effects are comparable in magnitude to the traditional interest rate channel in transmitting monetary policy, say IMF researchers
Sweden's Riksbank holds rates, but new deputy dissents
Ingves suggests the possibility of another increase in mortgage risk-weights after they were raised to a minimum of 15% in April; Riksbank estimates consumer price inflation to remain at 1% in 2013
Fed board member highlights 'especially daunting' challenge of cross-border bank resolution
Jerome Powell says new American approach could serve as a 'simplifier – making theoretically possible something that seemed impossibly complex'
Federal Reserve adopts Basel III for US banks
Fed Board unanimously votes to introduce new capital requirements as of January 1; Daniel Tarullo says additional measures will follow including proposals for a higher leverage ratio
BoE's Tucker wants immediate 3% leverage ratio in UK
BoE deputy governor Paul Tucker calls for 3% leverage ratio to be imposed immediately on UK banks; says banking crisis has taken capacity out of financial system
New York Fed's Dudley says ‘much more' to be done to ensure financial stability
Central bankers and regulators must remain vigilant for ‘symptoms of instability', says Dudley, who admits the task of ‘securing financial stability will never be truly complete'
Chile central bank warns of volatility on US QE withdrawal
Latest monetary policy and financial stability reports say economy and banks remain on the right track, but ‘tapering' from the US Fed could cause volatility in the Chilean financial markets
Cyprus central bank told to dilute governor power
Independent report says too much power was concentrated in the governor’s hands in the build-up to the recent Cypriot crisis; calls for new policy-setting committee with non-executive majority
RBNZ bulletin examines last crisis through ‘macro-prudential lens’
Article finds that a counter-cyclical capital buffer and changes to the core funding ratio could have been ‘usefully employed’ in 2004 to build financial sector resilience
Norges Bank economists examine motivations behind bank regulation
Staff memo sets out reasons why banking is ‘inherently unstable’ activity; says safety nets can create the need for further regulation
Caruana backs Bernanke taper timetable but warns banks to prepare for volatility
BIS general manager says Fed chairman Ben Bernanke was right to signal a tightening of monetary policy but warns stress tests will be needed to prepare banks for an increase in volatility
Bank of Spain rings organisational changes
General secretariat handed new department for market conduct and claims; new financial stability units set up to address banking analysis, macro-prudential policy and impact of regulation
Weidmann says regulation must strengthen principle of individual responsibility
Bundesbank president says higher capital requirements will enable banks to shoulder greater losses by themselves; correct sequence of liability under common European resolution rules also needed
Canadian deputy says shadow banking could push up household debt
Timothy Lane raises concerns over the securitisation of government-guaranteed mortgages through shadow banks; says the low-cost funding could increase lending for mortgages
RBNZ deputy threatens use of loan-to-value restrictions to curb housing demand
Grant Spencer says interest rate hike would not be an 'appropriate response' to strong housing demand while macro-prudential intervention could be effective
EU finance ministers strike deal on bail-ins
Rules seek to impose losses from bank failures on creditors; national authorities told to create resolution funds to absorb losses in ‘exceptional cases’
Monetary policy links to financial stability ‘are not straightforward', says Fed paper
Research paper from Fed's Finance and Economics Discussion Series finds monetary policy and financial stability concerns can be complementary - but the connections are complex
Fed presidents in conflict over 'too-big-to-fail'
Lacker, Fisher, Hoenig and Bair called before US Congressional committee to voice their opinions on Dodd-Frank Act's Orderly Liquidation Authority
Fed proposals seek to shine light into money markets
Proposals for daily data reporting by a panel of 155 banks aim to improve the Federal Reserve's ability to supervise shadowy money markets
Basel Committee reveals leverage ratio formula
Proposals detail leverage ratio calculation framework and disclosure requirements that will enter force in 2015; committee keeps options open for a higher leverage ratio than originally planned
Chinese financiers hit out at 'blind' PBoC
China central bank accused of being blind to potential capital market reaction in its attempts to clamp down on the shadow banking sector
Bank of England concerned by ‘vulnerability’ to interest rate increases
Financial Stability Report calls for assessment of financial institutions' exposure to increases in global interest rates; recommends banks are allowed to reduce their liquid asset holdings