Financial Stability
Bank of Italy research finds evidence of investors ‘waking up’ to sovereign risk
Working paper suggests widening eurozone sovereign spreads caused by ‘complacent’ investors suddenly paying closer attention to risks
NY Fed president dispenses policy advice to European and US governments
William Dudley tells European policy-makers that moving forward with banking union is critical, while the US government should be worrying more about its fiscal outlook
European Parliament claims substantive agreement on EU bank resolution legislation
Vote on legislation for harmonised recovery and resolution processes postponed till May, but European Parliament says it has reached agreement on all the main points
Independent Scotland would face ‘significant risks’ under sterling union, says Westminster
UK government report points to drawbacks of all the currency options for an independent Scotland; refuses to back Scotland’s preference for a sterling union
Bank of Japan deputy governor warns over ‘fallacy of composition'
Role of central banks has evolved to include market-maker of last resort and global lender of last resort; however, they must keep a macro-prudential perspective
Central Bank of the Philippines continues forex liberalisation drive
Relaxed rules for onshore foreign exchange transactions aim to cope with rising demand and encourage public to move informal transactions into the banking system
Fed’s Stein backs ‘committed liquidity facility’ as supplement to Basel LCR
Federal Reserve governor says facility approved for use in Australia could be a good way of maintaining liquidity during crisis and imposing a ‘pollution tax’ on illiquid banks
G-20 unconcerned about Japanese monetary easing
Meeting of G-20 finance ministers spent ‘much less time’ discussing currency moves than at their last meeting; warns US and others to watch for bubbles
RBI’s Subbarao weighs merits of new consensus on capital controls
Duvvuri Subbarao says financial crisis shattered consensus view that capital controls should not be used, but deploying them correctly is still far from straightforward
Norges Bank governor backs plans for counter-cyclical capital buffer
Øystein Olsen gives support to proposals by the Norwegian government to introduce a counter-cyclical capital buffer; will be set by ministry of finance with advice from the Norges Bank
Netherlands Bank highlights ‘major risk’ of European crisis escalating
Financial stability report says danger from European debt crisis still looms large; warns of longer-term risks including addiction to low interest rates and incomplete banking union
Robert Pringle's Viewpoint: King’s efforts to be heard hit some marks
In his calls for reform, Bank of England governor Mervyn King has ploughed a lonely furrow. But some of his efforts are paying off
National Bank of Poland updates 18-year-old banknote security
Security features of Polish banknotes to be overhauled in 2014; central bank keeping tight-lipped on the upgrades
FSB and IMF ‘animosity’ claim rejected
Think-tank report blasts lack of co-ordination between organisations in early warning exercise; FSB secretariat member rebuffs claims, and brands exercises a success
CPSS and Iosco start assessing compliance with FMI principles
Organisations begin process of monitoring ‘full, timely and consistent’ implementation of Principles for Financial Market Infrastructures across jurisdictions
Asia faces increasingly complex risk, says MAS assistant managing director
Ng Nam Sin says insurers face both growing opportunities and increasingly large, complex and interconnected risks; Asean committee will help promote co-operation
SNB research finds Swiss franc is only safe haven against some currencies
Paper suggests Swiss franc is a safe haven from euro but not from other major reserve currencies; says this may be down to small size of market
SNB vice-chair tells people to ‘fasten seatbelts’ following CCB activation
Jean-Pierre Danthine says activation of the counter-cyclical capital buffer aims to avoid a sharp fall in property prices and rise in defaults, but achieving a soft landing will be challenging
IMF flags growing risks from low interest rate environment
Global financial stability report urges caution by central banks employing loose monetary policy; says lack of adjustment to medium-term challenges could create ‘chronic phase’ of crisis
Fed demands more detailed 'living wills'
Federal Reserve and FDIC request additional information on risks that could derail resolution plans for largest bank holding companies, including issues of international co-operation
Financial Stability Board demands faster OTC reform
FSB reveals that every one of its members missed the G-20 deadline for reforming OTC derivative markets; urges “rapid progress” in 2013
ECB’s Cœuré highlights US and Europe payments division
Executive board member Benoît Cœuré says credit cards play a larger role in the US payments industry; identifies benefits of expanding European debit card usage
BoE’s Bailey questions why top managers not punished for failure
Head of prudential regulator says it is ‘more than odd’ that people lower down the ranks in financial institutions were punished for failures but not top managers; warns EU remuneration plans undermine UK efforts
Colombian paper flags danger from abnormal credit growth
Credit expansion does not always imply excessive risk-taking, but abnormal credit growth causes greater risk-taking and contributed to Colombia’s financial crisis in the late 1990s, paper finds