Financial Stability
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
RBNZ’s new governor rejects QE and capital controls
Reserve Bank of New Zealand’s Graeme Wheeler sees no need to introduce a ‘desperate’ measure such as quantitative easing in the country; rules out use of capital controls to limit kiwi dollar appreciation
Structure of banks must change as they grow, says BoE’s Haldane
The Bank of England’s Andrew Haldane discusses ways to address the ‘too-big-to-fail problem’; considers impact on banks’ economies of scale
Macedonian vice-governor assesses impact of European deleveraging
Maja Kadievska Vojnovik says Macedonia has been spared most of the direct effects from deleveraging by European banks largely due to the ‘prudent’ funding structure of local banks
FSB resolution paper due in ‘next few weeks’, says BoE’s Tucker
Lack of national legislation on resolution mechanisms has made the drafting of international standards for resolution regimes tricky. But an FSB consultative paper will be issued in the coming weeks
Customer funding gaps fall at Danish banks
Stress tests performed by the National Bank of Denmark show an increase in the capitalisation of the country’s banks; funding gaps shrink as deposits soar and lending falls
Basel Committee official rebuts criticism over regulatory complexity
Basel Committee secretary-general defends Basel III from critics who argue it is unnecessarily complicated; says additional detail needed to meet the increasing complexity of financial markets
Korea to miss OTC clearing deadline
It is ‘highly unlikely’ Korea will meet the deadline to start clearing OTC derivatives by January 1, 2013, due to legislative delays, according to market participants
Colombian paper proposes measure of systemic importance
Central Bank of Colombia study identifies important characteristics related to size, connectedness and substitutability that determine the systemic importance of financial institutions