Financial Stability
RBNZ gets macro-prudential go-ahead
New Zealand’s’ central bank tools up with four macro-prudential instruments; analyst says continued growth in house prices could prompt action before year-end
Orphanides lambasts European ‘blunders’
Former Central Bank of Cyprus governor attacks European authorities for mismanaging sovereign debt crisis; holds communist party responsible for Cypriot bailout
RBI’s Chakrabarty fleshes out plans for risk-based supervision in India
Deputy governor examines pre-requisites for effective risk-based supervision as central bank prepares ‘phased migration’ to the new approach
ECB research uses game theory to assess optimal T2S adaptation
Working paper attempts to find optimal lump-sum investment by central securities depositories migrating to Target2 Securities, and tests possibility of tacit collusion
VocaLink: Seven-day account switching set to shake up UK banks
Chris Dunne says UK payments are undergoing important changes that could see ‘economic battle' between banks; expects closer scrutiny of infrastructure by regulators
Swedish deputy wants central bank independence reconsidered
Barbro Wickman-Parak, in her last speech at the Riksbank, says independence is ‘essential’ for price stability but needs to be reviewed with regard to macroprudential policy and financial stability
Irish plan for distressed borrowers attracts criticism
Central Bank of Ireland encourages cooperation between lenders of secured and unsecured debt to keep distressed borrowers from bankruptcy; Irish League of Credit Unions denounces scheme
Iceland’s Guðmundsson backs MAS-style stability model
Icelandic governor says managed float and strong supervision are important lessons to be taken from Singapore; says capital controls helped avoid a default in Iceland, but should not be used lightly
Bernanke outlines Fed's ‘intensified' monitoring of financial system
Focus is on Sifis, shadow banking, asset markets, and the non-financial sector, according to the chairman of the Federal Reserve
Ireland’s Elderfield says ‘imperfect’ Solvency II should still go ahead
Deputy governor highlights many imperfections in the Solvency II framework but says it is better than the fragmentation and rising costs that are the alternative
FDIC’s Thomas Hoenig on bank separation, safety nets and Basel III
Hoenig tells Christopher Jeffery that Basel III is flawed, universal banks require legal separation, financial safety nets need cutting and monetary policy should move to non-zero interest rates
The SSM, banking union and the future of prudential policy in Europe
The establishment of a single supervisory mechanism under the ECB will help mitigate a number of threats to Europe’s financial system, writes Ignazio Angeloni. But still more needs to be done
The Eurosystem has done enough; time for politicians to choose
The Eurosystem has done enough to support the eurozone, says Jens Weidmann, who believes the euro area should either accept fiscal union or allow sovereigns to default
Booknotes: After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead
According to Alan Blinder's publisher, he has taken the time 'to think his way through to a truly comprehensive narrative of how the worst economic crisis in postwar American history happened'
Booknotes: The Federal Reserve and the Financial Crisis
This volume is based on the transcripts of four lectures from a series delivered by the chairman of the Federal Reserve Board at George Washington University in the spring of 2012
Booknotes: Bull By the Horns: Fighting to Save Main Street from Wall Street and Wall Street from itself
This is a great book with a clear message: no more bailing out of too-big-too-fail banks.
Booknotes: The Leaderless Economy: Why the World Economic System Fell Apart and How to Fix It
The title of Peter Temin and David Vines’ book, especially its subtitle, promises the reader a lot
Bank of Spain financial stability report finds ratio of bad loans still growing
Contraction in new lending to households and businesses, combined with a poor macroeconomic environment, means Spanish bank loan books are on average not improving
NY Fed paper assesses risk of fire sales in tri-party repo markets
Staff report finds limited tools are available to reduce the damage from pre-default fire sales but says there are no options currently available once a default has occurred
Australian regulators unveil criteria for mandatory clearing
Three regulators, including the RBA, reveal how they will decide whether and when to implement mandatory clearing requirements for OTC derivatives
Asmussen and Rehn sketch plans for European body to replace ‘troika'
ECB board member defends scale of emergency liquidity extended to ‘insolvent' Cypriot banks; confirms the bank has an open mind on ABS purchases to ease SME credit crunch
Korea paper warns developing economies over financial openness
Research suggests open capital markets in developing economies create output volatility; suggests Asian countries are the least stable in a crisis
RBI sees scope for Giro payments system
Committee finds India’s existing payments system fails to meet consumers’ needs when paying bills; proposes a supplementary system to move bill paying onto a single interoperable platform