Financial Stability
Nordic-Baltic crisis simulation seeks to reinforce collective response
Nordic-Baltic Stability Group carried out first region-wide crisis scenario in January
The Brexit conundrum
Bank of England has only limited room to respond to hard Brexit
Volcker rule helped curb equity market risk – researchers
Banks had large trading exposures to equity market risk before the rule was introduced, they find
Weak EU banks more likely to prop up ‘zombie firms’, ECB paper says
EU needs insolvency reform to reduce proportion of uncompetitive firms, researchers argue
IMF prepares to overhaul its financial surveillance
Fund agrees with IEO report that there is much room for improvement, but budget is an issue
MAS establishes long-term corporate governance committee
New body will replace short-term councils formed every few years
ECB paper presents new financial crisis early warning system
Model aggregates five types of systemic risk indicator, researchers say
UK cash system needs revamp, says Payment Systems Regulator chair
Charles Randell says regulator will look at entire cash provision infrastructure in 2019
Brexit solution that ‘works for all’ must be found – Carney
BoE governor calls Brexit an “acid test” of a “new global order”
For-profit CCPs may not hold socially optimal capital – BIS paper
“For-profit CCPs have incentives that are misaligned with financial stability,” author says
FSB publishes annual work programme for first time
Priority is to address new vulnerabilities, while finalising, implementing and evaluating reforms
Arab countries must improve funding of small businesses – IMF’s Lagarde
SMEs make up 96% of Arab world’s businesses but get only 7% of bank loans – IMF chief
Fed’s Bowman says regulators must tailor regulations for smaller banks
But stress-test reform to relieve smaller banks is credit negative, Moody’s warns
Quarles says FSB ‘must evolve’
New chair calls for changes in the way the organisation assesses financial sector threats
CBDC is mixed bag for financial stability – Bank of Korea
Central bank paper highlights stability concerns but adds some positives
Russian authorities start criminal investigation of failed bank owner
Private lender Otkritie was nationalised by central bank in 2017
Romanian central bank holds talks with government over tax dispute
National Bank of Romania rejects calls to abolish interbank rate
ECB stress tests to focus on liquidity risk
Tests will measure systemic European banks’ “survival period” without access to funding markets
Unconventional policy should be used rapidly – Fed paper
Researchers find 20–50% chance that US will face zero lower bound in next decade
Thai central bank warns of housing and debt risks
Central bank says macro-prudential policy should curb build-up of weaknesses
Data overhaul needed to enhance insolvency frameworks – IMF
Paper highlights the importance of data in analysing efficiency of current resolution policies
Fed’s 2019 stress tests to assume largest unemployment shock to date
Central bank also announces moves to enhance transparency in its stress-testing programme