Financial Stability
Regulated banks take greater risks abroad, says ECB paper
ECB study finds banks subject to tight regulation for domestic activities respond by relaxing lending standards abroad
Lagarde implores next US president to act fast on ‘fiscal cliff’
IMF managing director Christine Lagarde has challenged the next US president to urgently address Washington’s ‘policy uncertainty’ irrespective of who wins
Banks suspend dual-currency deposits in Japan
Returns on dual-currency and structured deposits will not be covered by state insurance scheme, Japanese FSA decides
International reserves provided shelter from crisis, says Finland paper
Bank of Finland study says the accumulation of international reserves provided some countries with a buffer against the crisis; not such a clear-cut relationship with economic growth
Basel proposal to capitalise settlement risk ‘unnecessary’
In comment letters published last week, banks have taken issue with Basel Committee guidance that would capitalise post-execution exposure to settlement risk
FSA’s Turner warns emerging markets not to repeat West’s mistakes
UK Financial Services Authority head warns public officials in emerging markets to beware bank lobby groups and their story of the limitless benefits of finance
LCR drives expanding Asian liquidity swap market
Insurers are increasingly providing liquidity swaps to banks in what is viewed as a growing trend in Asia
FSB reveals G-Sib additional capital charges breakdown
FSB says four major banks to be hit by top 2.5% additional capital buffer as three banks leave and two are added to the list of global systemically important banks
Fed study shows US banks still wary of lending to European peers
US banks are continuing to tighten lending standards to their European counterparts with some winning additional business as a result of reduced competition from European banks, Fed study finds
ECB ends second covered bond programme
European Central Bank ends covered bond programme after buying €16.4 billion out of a planned €40 billion of the securities issued by euro-area banks; plans to hold purchases to maturity
Local trade repositories are necessary, say HKMA’s Lee
The benefits of local trade repositories outweigh the possible disadvantages of multiple reporting requirements, says executive director of HKMA’s financial infrastructure unit
FSB finds OTC derivatives reforms riddled with gaps
Progress report shows market infrastructure is ready to meet G-20 commitments for OTC derivatives reform but many jurisdictions are still some way from implementing legislation
Hurricane Sandy disrupts Federal Reserve operations
New York Federal Reserve suspended operations for a day as hurricane battered eastern US; temporary measures taken to support banking in face of disruptions to power, communications and staffing
Banks’ net worth impacts cost of credit, says ECB paper
Research published by the ECB finds a drop in banks’ net worth increases the cost of credit for companies; model shows subsequent decline in GDP and inflation
Italy’s Visco promotes ‘deeper’ Europe
Bank of Italy governor says long-term solution to crisis is a more fully constructed Europe, although not all central bank tasks should be centralised
CCP structure increases systemic risk, says IMF economist
The likely increase in the number of central counterparties will create more 'pockets of risk', says senior economist
BoE’s Haldane debates banking reformation with Occupy
Bank of England’s Andrew Haldane discusses the banking system with social inequality activist group; urges bank reform rather than 'banker bashing'
BIS’s Cecchetti envisages world without G-Sifis
Stephen Cecchetti says the global financial system needs to reach a stage where no banks are globally systemically important; market discipline critical to stability but not sufficient
Spain’s ‘bad bank’ structure revealed
Bank of Spain releases the details of new ‘bad bank’ Asset Management Company; hopes to clear up banks’ balance sheets while producing a 14–15% return on equity for stakeholders
Polish paper says euro would have destabilised economy during crisis
National Bank of Poland research examines how adopting the euro would have changed the impact of the financial crisis; fixed exchange rate would have exposed economy to greater shocks
FSB task force proposes enhancements to risk disclosure
Private-sector task force organised by the Financial Stability Board outlines seven principles designed to improve banks’ risk disclosure, with implementation of some sections to begin immediately
Basel Committee reports slow progress ahead of G-20 meeting
Report submitted to G-20 leaders ahead of summit shows just six of 29 systemically important banks are likely to be subject to Basel III rules when deadline is passed
Bundestag approves Germany’s Financial Stability Act
German lawmakers approve new macro-prudential powers for financial supervisors, with the Deutsche Bundesbank gaining a key monitoring role
IMF paper analyses regional impact of deleveraging
Research published by the IMF considers why Asia’s domestic credit supply suffered less than that of other regions in response to banks deleveraging in 2008