Financial Stability
ECB 'conflict of interest' puts effective supervisory mechanism at risk
The European Parliament's rapporteur on the SSM fears a conflict of interest inherent in the ECB stands in the way of creating an SSM that is up to the task
NY Fed paper highlights money market fund ‘stampede’ risk
Staff report finds intermediation by money market funds can turn unexpected withdrawals into runs, meaning a small shock can bring down the whole banking system
Ireland passes emergency liquidity restructuring bill
Irish parliament passes bill to transform promissory notes into long-term sovereign bond, and wind up 'bad bank'
HKMA shores up Hibor-setting mechanisms
Package of measures aims to improve the transparency and robustness of the benchmark rate; UK bank fined $612 million by US and UK regulators over Libor rigging
FDIC director backs Haldane on leverage ratio
Jeremiah Norton follows Bank of England’s Andrew Haldane in criticising Basel III’s risk-weighted assets, and says a higher leverage ratio would be a simple, effective solution
Ex JPMorgan chief backs UK banking regulations
Bill Winters says banks won't ‘up sticks' and leave London in light of tougher regulation, but rejects the addition of a ‘Volcker rule' to the ring-fence
Ireland aims to cut cheque use by two thirds in three years
Central Bank seeks to reduce cheque usage in line with European average, with the potential for significant reductions in the cost of payments
Robert Pringle’s Viewpoint: Assessing Masaaki Shirakawa’s legacy
The policies of outgoing Bank of Japan governor, Masaaki Shirakawa, have brought economic stability to Japan and are likely to be viewed favourably by future generations
FSB endorses South African reform efforts
First peer review under new guidelines praises South African plans for ‘twin peaks’ regulators and tighter OTC derivatives rules; implementation still presents obstacles
Bank of Mauritius chief bemoans ‘glaring absence’ of bank resolution mechanism
Rundheersing Bheenick says lack of efficient resolution mechanism is harming Mauritius’s position as a global financial centre
Egypt takes new steps to halt economy's downward slide
Central bank adjusts exchange rate rules as Egyptian government announces it will complete its economic reform plan by the end of this week
Mexican governor proposes systematic approach for future crises
Agustín Carstens lays out crisis response plan for governments; stresses the need to manage expectations first and foremost
EC buttresses anti-money laundering defences
European Commission toughens line on money laundering, proposing new rules to cope with estimated $580 billion laundered in the global financial system in 2009, with just 0.2% intercepted
San Francisco Fed dissects long-term unemployment
Long-term unemployment has ‘persisted remarkably’ since outset of recession; should disappear over time as economic activity increases
Dutch paper says foreign banks can help or harm developing markets
Working paper finds foreign-owned banks in developing countries can provide cheaper and higher quality financial services, but may also transmit shocks across borders
‘Crisis in the eurozone is not over’, says MAS chief
MAS's Ravi Menon offers a roadmap to central banks and governments to help ‘normalise’ the global financial system; hits out at loose monetary policies and says fiscal policy debate is misinformed
South Africa moves toward UK-style ‘twin peaks’ regulators
Sarb issues consultative document on introduction of prudential and conduct regulators similar to plans in the UK; IMF study encounters problems in testing efficacy of macro-prudential policy
UK to ‘electrify' bank ring-fence in bid to end ‘too big to fail'
UK chancellor launches legislation to enforce ring-fencing – and separate banks that fail to comply
ECB paper tweaks the evaluation of early warning systems
Research proposes changes in the way the costs and benefits of early warning systems are calculated
NY Fed president calls for tri-party and money fund reform
William Dudley lays out a range of options to ‘make the basic structure of the wholesale funding market as sound as possible'
Rating agency warns of knock-on effect of Fed’s foreign bank rules
Fitch says tighter rules for foreign banks operating in the US are likely to make other countries raise standards as well, putting a squeeze on the growth of global banks
Barnier still examining ‘where to draw the line' on bank ring-fencing
Commission spokesman admits tension between maintaining competitive banks that can still finance economic growth and eliminating risks remaining in the European banking system
Malawi at risk in wake of currency devaluation
Financial stability report reveals inflation doubled after Malawian government floated exchange rate and devalued currency by 50%
Riksbank at odds with proposals to limit capital, analysts say
Proposals released that would halve the size of the Riksbank’s balance sheet; analysts say they clash with central bank policy and are unlikely to be adopted