Financial Stability
HKMA, PBoC react to QE2
Hong Kong Monetary Authority and People’s Bank of China counter Fed’s quantitative easing programme with regulatory and monetary policy measures
Plosser: focus on real, not nominal, rates
Philadelphia Federal Reserve president Charles Plosser suggests targeting interest rates to lean against strong asset-price growth
ECB approves Target2-Securities baseline price
European Central Bank’s Governing Council agrees to fix the transaction cost for Target2-Securities at 15 cents per transaction but attaches conditions
Irish woes may spread to other PIIGS
European Union action on Ireland’s bank debts points to fears over contagion spreading across peripheral Europe
BoJ’s Noda: Japanese growth moderating
Bank of Japan policy board member Tadao Noda says Japan’s economy expected to moderate following weakness in exports
Italy’s Enria voices concern over regualtory arbitrage from Basel III
Bank of Italy head of the supervisory regulations and policies Andrea Enria says rigourous introduction of Basel across all countries and financial sectors will reduce risk of regulatory arbitrage
RBA’s Battellino: US households worst off from recession
Reserve Bank of Australia deputy governor Ric Battellino says US households share greater burden with every recession
Honohan expects IMF loan for Ireland
Central Bank of Ireland governor Patrick Honohan says his expectation is that IMF loan will be made available, likely to come to “tens of billions”
Posen: we can’t call bubbles
Bank of England external rate-setter Adam Posen cites empirical evidence showing difficulty in distinguishing asset-price booms from busts
Large pension funds a threat to financial stability – European Commission
European Commission says pension funds should also be classed as “too big to fail”
Hungary voices concerns over banking climate
National Bank of Hungary warns new government tax and appreciation of the Swiss franc will severely impair bank lending and its contribution to economic growth
ECB’s Stark: central bank’s more likely to react to asset-price growth
European Central Bank executive board member Jürgen Stark says central banks more likely to lean against against asset prices in future
BoE survey shows heightened risk aversion in lending
Bank of England’s Agents’ summary of business conditions shows impaired balance sheets caused lenders to remain risk-averse
The unintended consequences of the new prudential framework
The new regulatory code could have some dangerous side effects, Jacques de Larosière writes
Conflicts of interest and systemic risk
In regulating against conflicts of interest, central bankers will have to study exactly how each major bank is making its profits in future, John Chown argues
ECB’s Constâncio: Basel III implementation must avoid unintended consequences
European Central Bank vice president Vítor Constâncio says implementation of Basel III will be no easy task
Canada’s Carney favours contingent capital solution to too big-to-fail
Bank of Canada governor Mark Carney says embedding contingent capital in all future issues of new debt will privatise losses
Politics won't get in the way of Sifi plans: FSB's Draghi
Financial Stability Board chairman Mario Draghi says resolution regimes for systemically important banks operating across borders need not be bogged down in political tensions
IMF to pitch in on imbalances, but no clear agreement
G20 leaders call for Fund assistance in drafting “indicative guidelines” to frame global imbalances debate but stop short of definitive statement on currency dispute
Fed’s Hoenig: US housing policy badly flawed
Kansas City Federal Reserve president Thomas Hoenig says government intervention in housing markets was counterproductive
PBoC’s Zhou wants enhanced macroprudential policy in China
People’s Bank of China governor Zhou Xiaochuan says macroprudential policy must keep pace with the country’s financial growth
Canada calls for holistic approach to regulation
Bank of Canada study says regulators must consider capital, liquidity and short-term liabilities jointly when addressing systemic risk