Financial Stability
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
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