Financial Stability
ECB documents success of eurozone retail payment systems
European Central Bank releases comprehensive overview of the payments systems, including underlying concepts and the role of the central bank; book notes success of Step1 commercial payment system
Bank of Israel: FX intervention forced shekel depreciation
Bank of Israel study says ad hoc purchases successfully depreciated the value of the shekel against the US dollar
ECB’s González-Páramo highlights flaws in collateral framework
European Central Bank executive board member José Manuel González-Páramo acknowledges risks in central bank’s willingness to accept broad range of collateral
Settlement system gets go-ahead from RBNZ
Reserve Bank of New Zealand and Securities Commission give “statutory backing” country’s third settlement system; system a joint venture between central bank and stock exchange operator
Trichet to be first head of European Systemic Risk Board
European Central Bank president Jean-Claude Trichet will chair continent’s new systemic risk board until the end of his term; proposal reflects compromise between parliament and national governments
Islamic banks affected differently by crunch: IMF
IMF research finds Islamic banks outperformed conventional rivals in 2008, but trend was reversed following year
Fuld and Fed’s Baxter at odds over Lehman failure
Ex-Lehman Brothers’ chief Dick Fuld blames Federal Reserve for failure of investment bank; New York Fed general counsel Thomas Baxter says central bank could not have provided liquidity lifeline
Bernanke: Fed won’t rule out leaning against wind
Regulation should be “first line of defence” against bubbles, but FOMC is monitoring financial imbalances
Indonesia moots new rule to boost bank lending
Bank Indonesia to propose range of loan-to-deposit ratios to encourage lending; banks prefer to park deposits in money market due to perceived default risk
BoJ: Financial Markets Report
Stock market volatility, declining yields on government debt and money-market operations covered in review
Moral hazard not contained prior to crisis: Norges Bank paper
Norges Bank paper co-authored by Bank for International Settlements' Claudio Borio points to lessons from the Nordic experience
IMF’s Lipsky: five steps to systemic reform
First deputy managing director of the IMF John Lipsky summarises measures to safeguard stability
Afghan governor insists country’s biggest bank is solvent
Bank of Afghanistan governor Abdul Qadeer Fitrat refutes reports top officials at Kabul Bank have been fired due to corruption; stresses bank remains solvent as graft rumours threaten to spark run
JP Morgan slashes commodity desks
Fate of other prop desks unclear ahead of enactment of Volcker Rule
Core principles mostly apply to micro lenders: Basel Committee
Basel Committee on Banking Supervision issues final report on applying core principles to microfinance providers; tweaks needed on credit risk, capital adequacy and risk management
Focus on banks’ incentives must continue post-crisis: Bank’s Bean
Bank of England deputy governor Charles Bean says crisis focus on bank incentives must remain; financial market problems require macroprudential instruments
Debt to reserve ratio key indicator of country default: World Bank research
World Bank paper identifies ratio of debt to reserves as most important indicator of sovereign default
Banks’ role to be reduced in future financial system, IMF says
IMF position note says non-bank financial firms will see roles expand; IMF must refine its methods and broaden its view to keep up with changes
Kansas’s Hoenig calls for Fed to oversee mobile payments
Central bank is the only authority that will take holistic view of mobile payments security, Kansas Federal Reserve president Thomas Hoenig says
Basel Committee defends adjustments to Basel III as calibration decisions loom
Regulators describe difficulties ahead as they prepare for Basel III calibration and transition decisions in September
Bank of Canada on inflation expectations
Bank of Canada Review features articles on targeting inflation expectations, rate pledges and using monetary policy to tackle imbalances
Peru nearly doubles reserve ratio on foreign deposits
Central Bank of Peru raises reserve requirement on foreign deposits to 120% in bid to stem capital inflows
BoK’s Kim on upcoming G20 summit
Bank of Korea governor Kim Choong-soo hails country as model for the world
Eurozone lending gathers steam: ECB
European Central Bank figures show growth of bank lending in single currency area increased in July; data follow signs of pickup in loan demand