Financial Stability
San Francisco paper studies effect of crisis on potential output
Federal Reserve Bank of San Francisco study examines US output potential; distinguishes between long-running trends and consequences of financial crisis
Greater use of renminbi will promote global stability, says Malaysia’s Zeti
China’s rising prominence in the global economy requires a dynamic response from policy-makers, says Bank Negara Malaysia governor; use of renminbi will promote global financial stability
‘Public inertia’ a sticking point for e-payments, Bank of Lithuania finds
Bank of Lithuania investigates costs involved in providing payments systems; suggests ‘public inertia’ is slowing the switch to electronic
RBA unveils details of new banknote programme
Reserve Bank of Australia releases details of plans to improve security features on its polymer banknotes. Scandal-hit Note Printing Australia to produce the new bills
BoE’s Jenkins attacks banking sector myths
Bank of England Financial Policy Committee member says myths about regulation are rife in the banking sector, with reform likely to suffer until the myths are dispelled
Kenyan report reveals battle to reduce inflation
Financial stability report released by the Central Bank of Kenya paints negative picture of growth; details monetary policy’s dramatic reaction to high inflation
IMF paper finds regulation will not damage economy
Research released by IMF finds banks can adapt to regulatory reforms without hurting the economy; higher lending rates are a price worth paying
Monetary easing does not prompt crisis recovery, says BIS paper
Paper published by the Bank for International Settlements finds monetary easing does not help economic recovery following a financial crisis downturn; deleveraging produces more positive effects
CBP panellists raise concerns over macro-prudential innovation
Central Banking Publications webinar participants debate challenge of implementing macro-prudential policies; panellists highlight risks from central banks’ limited experience with some tools
IMF report says regulation is ‘unfinished’
IMF report says more regulatory action may be required; suggests existing reforms may have unintended consequences that require mitigation
Banks could cut bail-in risk, says BoI capital head
Banks could issue more subordinated debt to protect senior creditors from the threat of a bail-in – in theory. But Bank of Ireland capital head says market is too thin
BBA resigned to likely loss of Libor-setting role
British Bankers’ Association says it will comply with Wheatley review if decision taken to change Libor-setting responsibilities; review’s conclusions to be presented on September 28
Cyprus governor urges fast implementation of SSM
Panicos Demetriades says the adoption of the single supervisory mechanism in Europe is a ‘matter of urgency’; says banking union is particularly important for Cyprus
RBA stability review offers update on D-Sibs
Reserve Bank of Australia provides update on new regulations for domestic systemically important banks
BoE’s Fisher details progress on ‘funding for lending’ scheme
Bank of England MPC member Paul Fisher reveals the initial uptake of UK ‘funding for lending scheme’; says impact difficult to judge
Finland board member discusses banking union challenges
Bank of Finland board member identifies benefits of a European banking union but emphasises the complexity of resultant political issues
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