Financial Stability
Saudi vice-governor warns of 'quantum leap' in money laundering
Abdulrahman Al-Hamidy says countries with weak defences may suffer from capital flight and higher levels of inflation
Danish governor sees further bank ‘resolutions' on the horizon
Nils Bernstein commends mortgage lenders for addressing the sector's challenges without the need for further legislation
Fiji's new $5 note is island nation's polymer pioneer
New FJ$5 note will be Fiji's first polymer banknote, and will supplant the defunct FJ$2 note as the country's smallest
IMF paper recommends China adopt ‘better-targeted’ macro-prudential policies
Study encourages China to tailor macro-prudential tools to regional and economics differences in country’s banks; suggests coupling policies with greater commercialisation
Norwegian paper finds implicit intra-day interest rate in UK money market
Research says that – in the absence of contractually binding repayment time – there is an implicit cost of delaying payments in the UK’s overnight money market
Brics leaders agree to set up $100 billion ‘financial safety net'
Contingent reserve agreement will allow Brics countries to provide each other financial support and will 'contribute to strengthening the global financial safety net'
Australian banks ‘relatively strong’, says RBA
Reserve Bank of Australia’s latest financial stability review finds banks’ profits and capital levels are increasing; real economy suffering from high exchange rate
RBNZ article says ‘open bank resolution’ helps keep banks in line
Quarterly bulletin describes resolution mechanism aimed at minimising disruption to bank customers; suggests use as an alternative to bail-out strengthens incentive for banks to operate prudently
BoE’s FPC calls on banks to raise more capital despite drop in lending
Financial Policy Committee says banks must correct a £25 billion shortfall by the end of the year, but should not cut lending; loans to private sector continue downward slide
Canadian deputy encourages use of derivatives central counterparty
Bank of Canada deputy calls for ‘material increase’ in central counterparty membership; supports smaller institutions accessing service through existing participants
Blanchard and Summers warn on central banks' democratic deficit
Axel Weber opposes supervisory role for central banks, as Olivier Blanchard and Larry Summers warn expanded mandates cause questions over democratic accountability
BoE Financial Policy Committee gets three new members
Former LSE head Clara Furse among the new external members named to Bank of England’s FPC; Donald Kohn re-appointed to his post
BoE survey sees signs of easing in UK financial markets
Funding costs fall and investor demand rises ‘significantly’, although total volumes remain roughly flat, Bank of England liabilities survey finds
Cyprus strikes last minute bail-out deal
Eurosystem agrees to €10 billion bail-out package after Cyprus vows to honour deposit insurance and resolve failing banks; questions remain over capital flight when banks re-open
IMF paper contrasts European countries’ capital accounts
Finds capital accounts rebalanced faster in emerging European countries than in the periphery; attributes difference to faster wage and public sector adjustment
BoE urges banks to use payments systems directly
Bank of England identifies need to clamp down on banks accessing high-value payment systems through other banks as it creates credit and liquidity risks
BoJ researchers find Japanese banks hold too many stocks and too few bonds
Working paper analyses optimal ratio of stocks to bonds for banks to hold; finds most Japanese financial institutions are overweight equities
US banks and regulators both failed on Basel II parallel runs, says Fed official
Failure to exit Basel II parallel runs represents a 'black eye' for US financial sector, says Federal Reserve Bank of Richmond unit head
US agencies clamp down on leveraged lending
Fed, FDIC and OCC issue updated standards for leveraged lenders amid concerns standards are again slipping and many institutions have ‘proven less than satisfactory’ in risk management practices
Depositors will trust EU guarantee despite Cyprus, says Banque de France official
Policy-makers have incentive to accelerate deposit guarantee plans, says Sylvie Matherat of the Banque de France
HKMA report tells investors to brace for volatile financial cycle
Financial stability report says risks from property market volatility have continued to mount; central bank says macro-prudential policy is doing its job but there could be a sudden price reversal
Kazakh banks should go beyond Basel III, says central bank
Financial stability report calls for banks to boost capital levels above Basel III requirements; encourages largest banks to clean up balance sheets and lend more
RBNZ looks to toughen payments oversight
Reserve Bank of New Zealand deems its oversight powers ‘insufficient’ in internal review; proposes new powers to boost authority over payments industry
Dutch paper analyses changes in unsecured overnight money market
Study examines changes to the ECB’s monetary policy framework in the mid-2000s; finds they reduced volatility in Dutch segment of Target II system