Financial Stability
SNB bond-buying ‘exacerbating’ euro fragmentation – S&P
Rating agency says Swiss National Bank activity is deepening divergent market conditions for euro sovereign issuance
Trust in Modigliani-Miller theorem is misguided, say former BCBS members
Regulators are wrong to believe changing the capital structure of banks will not affect their value as stated by the Modigliani-Miller theorem, say Urs Birchler and Patricia Jackson
US regulators release capital estimation tools for community banks
US federal banking regulators offer capital estimation tools to help community banks assess impact of proposed capital rules before comment period closes
Europe must tackle financial fragmentation, says ECB’s Cœuré
Benoît Cœuré says banking union will stem financial fragmentation in European Monetary Union; integration will require flexibility in the short run
BoJ’s Yamaguchi fears asset purchase backlash
Bank of Japan deputy governor says asset purchases may be misinterpreted as fiscal monetisation; could impact market’s confidence and interest rate levels
ESRB’s first ‘risk dashboard’ shows some positivity
European Systemic Risk Board releases first set of 43 indicators of risk for European countries; highlights some signs of improvement in financial markets
ECB paper analyses factors driving portfolio flows
Working paper studies time-varying drivers of capital flows to emerging markets; finds investors are more sensitive to local factors during market stress, while extreme stress can cause a panic
Hoenig supports bank ring-fencing in the US
Federal Deposit Insurance Corporation director says public trust in financial institutions and government must be rebuilt; wants banks' safety net retracted
Robert Pringle’s Viewpoint: Central bankers gamble for high stakes
The world’s major central banks have made high-stakes bets in a bid to stabilise economies. But their efforts may do little to promote confidence in the longer-term future of monetary management
Former Cypriot governor says OMTs will not suffice
Athanasios Orphanides says ECB's bond purchase programme will not achieve long-term financial stability; says a political problem requires a political solution
EBA chairman underlines urgency of market benchmark reforms
Andrea Enria says European Banking Authority is working at a ‘much higher speed’ to address fixing of market benchmarks; investigation into Libor rate scandal is continuing
Dombret stresses need for national influence over global regulation
Deutsche Bundesbank’s executive board member says global regulations must be adaptable to individual nations’ needs; peer pressure will ensure rules are adopted
Zambian governor calls for shared mobile banking platform
Michael Gondwe discusses the role of mobile banking in financial inclusion; says cooperation between payment systems will help widen access
RBI deputy governor wants real sector reforms
Kamalesh Chandra Chakrabarty says a second generation of economic reforms is needed; measures should target individuals rather than the financial sector as whole
Bank of Greece sets out drastic cost-cutting measures
Greek central bank governor sends letter to ECB explaining steps taken to reduce operating costs and wages at the institution; includes cumulative 50% pay cut for top officials
Giff 2012: Central bank action enables Europe to reverse fiscal austerity, says Turkish deputy prime minister
Central banks have created a ‘window of opportunity’ for governments in Europe and elsewhere to embark on fiscal expansion to spur short-term growth, says Turkish deputy prime minister
ECB paper analyses euro stability measures
ECB research assesses eurozone stability measures; says a European-wide framework for recapitalising large and systemic banks is still needed
BIS paper examines link between low growth and recessions
Bank for International Settlements research studies relationship between low growth and recession in the US; finds some growth patterns can forecast a sharp decline in GDP
Giff 2012: Malaysia’s Zeti calls for a ‘bridging’ of economies to promote Islamic finance
Bank Negara Malaysia governor says Islamic finance has emerged from the financial crisis in a position of strength, but more co-ordination is needed to ensure the industry continues to flourish
Bulgarian governor against accession to banking union
Ivan Iskrov expresses opposition to the idea of Bulgaria joining the proposed EU banking union; discusses protecting domestic economic interests
BoE director says bail-ins getting closer
Andrew Gracie says the central bank is close to a functioning bail-in regime; a framework has been developed under the European Recovery and Resolution Directive
Giff 2012: Experts divided on Islamic finance as financial stability panacea
Speakers and delegates attending the Global Islamic Finance Forum in Kuala Lumpur split on role Islamic finance can play in alleviating global financial instability
Basel Committee unveils revised core principles
Updated core principles for effective banking supervision released; Basel Committee says 'more than 100' national banking supervisors endorsed the latest document
RBI official highlights stumbling blocks to ‘less-cash society’
G Padmanabhan says the development of prepaid transactions in India is ‘not very heartening’ despite non-banks being admitted into the market