Financial Stability
Working group minutes: macro-pru calibration challenges
Many central banks are struggling to get enough data, particularly on borrowers
Basis trade loses its bite as banks move in
Returns on popular hedge fund strategy dwindle to as little as three basis points, while dealers make use of softened capital rules to replicate the trade
BoE’s crisis lending plan hits buffers
Scepticism greets regulator’s proposal to increase releasable leverage capital buffers
LLMs can analyse news articles to spot stability risks – ECB study
Authors use AI to find trigger events in dataset of over 1 million stories
Supervision Benchmarks 2026 – model banks analysis
Additional data breakdowns shed light on differences between advanced and emerging economies
Nino Jeladze on overseeing Georgia’s fintech hub ambitions
National Bank of Georgia’s vice-governor speaks about efforts to develop stablecoin and fintech rules that encourage innovation while safeguarding monetary transmission and financial stability
Supervision Benchmarks 2026 – executive summary
Benchmarking data reveals how supervisors are adopting AI and upgrading data processing
Implications of the 2026 Middle East war
Gavin Bingham, Paul Fisher and Andrew Large detail the monetary policy, financial stability and international co-operation challenges for central banks
Asia-Pacific central banks say AI risks require ‘vigilance, agility’
MAS and BoT also sign anti-fraud MoU on sidelines of meeting involving 11 monetary authorities
Supervision Benchmarks 2026 report – AI and data
Benchmarks highlight sharp rise in AI use as well as continued improvements to data handling
MBS convexity hedging: back with a vengeance, or ghost story?
More bonds now sit with active hedgers but market is split on whether flows can move US rates again
Banks are reallocating risk, not reducing it – NY Fed study
Under Basel III, banks’ parent companies have made NBFI subsidiaries more fragile, authors say
Jasmina Selimović on managing Europe’s last currency board
The Central Bank of Bosnia and Herzegovina governor speaks about building resilience to counter geoeconomic shocks, strengthening reforms amid EU convergence, addressing stablecoin and NBFI risks, Sepa integration, and capacity building.
Kazakhstan scraps FX rule for state-affiliated companies
Requirement for proceeds to be sold domestically was implemented when Ukraine war led to depreciation
Odean White on cyber, natural disasters and geopolitical risks
Bank of Jamaica’s chief risk officer discusses weather event contingency planning, the impact of ‘shocks’ on policy, being proactive on quantum, and countering phishing and AI-enabled attacks
BoK sees AI boom continuing
Central bank dismisses concerns that semiconductor business cycle has peaked
Some G-Sibs’ capital exceeds Basel III provisions – BIS study
Certain jurisdictions demand higher-quality capital than is required under post-GFC rules
Data quality is main focus for improved supervisory reporting
Supervisors with high level of automation rate submissions more highly, but quality still an issue
Vietnam tracks towards credit growth target
Central bank deputy governor says lending grew by around 7.4% in first six months of year
Kenyan president signs new central bank law
Amendment provides framework for institution to offer emergency liquidity assistance
BoE proposes lower bank leverage ratio amid rising market risks
FPC warns that pace of AI investment is ‘unprecedented’ and sovereign debt is ‘historically high’