Financial Stability
HKMA dismisses reports it will establish ‘bad bank’
Monetary authority says lenders’ balance sheets are healthy and their credit risks well managed
Yield curve affects banks’ ability to lend – Boston Fed study
Central banks should consider effects when calibrating balance sheet policies, say authors
US monetary policy has greater impact, BoK modelling shows
Researchers say findings show importance of diversifying export markets and monitoring US conditions
Tobias Adrian on the integrated policy framework amid tariff shocks
The IMF’s financial counsellor speaks about policy reaction functions to supply and demand shocks, scenario-based analyses, Treasury market dynamics and emerging market resilience
Data automation at ‘moderate’ level in most supervisors
Over 70% of supervisors plan to upgrade data collection in the next year
Sovereign bond yields affected by weather disasters – BIS paper
Countries with higher per capita carbon emissions also face greater borrowing costs
Book notes: Central banking at the frontier, by Thammarak Moenjak
This well-structured book provides a comprehensive overview of the challenges digitalisation poses for finance and includes possible actions for central banks
BoE shifts focus to non-banks in sovereign bond markets
Aggregated data on leverage and positioning reveals growing gilt repo borrowing by hedge funds
FSB sets up task force to tackle non-bank data gaps
“High-level” team will investigate leveraged trading strategies in core bond markets
How central banks manage their own cyber defences
Resilience against system breaches, ransomware and phishing attacks is in focus, alongside managing third-party risks and the threat of state actors to payment systems
Do not loosen capital rules, ECB tells national authorities
Central bank says there are no signs that requirements are constraining credit supply in eurozone
Most supervisors monitor banks’ exposure to non-banks
But majority do not apply Pillar 2 requirements specific to non-bank exposures
Tariffs worsen monetary policy trade-offs and inflation – study
Fed researchers find evidence of persistence in cost pressures stemming from levies
Boris Vujčić on Croatia’s economic journey, the digital euro and the Governing Council
The Croatian National Bank (HNB) governor speaks with Christopher Jeffery about managing financial risks, the pros and cons of euro adoption, payment system reform and the use of real-time data
Tokenised MMF market ‘small’ but could create contagion – BdF
French central bank calls for international co-operation to regulate new assets
Book notes: The young Fed, by Mark Carlson
A thoughtful book on an important topic and a less widely studied period of US financial history from which every central bank economist could learn
Geopolitical ructions and the role of the dollar
Implications of the new US administration’s policies for the international monetary system and central banks
Basel III not holding back development finance – Thedéen
Regulations should not be viewed as “scapegoat” for lack of investment, says committee chair
Ex-OCC chief Michael Hsu on the impact of an America-first agenda
The former acting comptroller of the currency speaks with Christopher Jeffery about the future of the US Treasury market, Fed independence, financial de-regulation, the Genius Act and international co-operation
Global economy at ‘pivotal moment’, BIS says
Policy-makers must not forget structural weaknesses when dealing with near-term shocks, body says
Central bankers launch forum to share supervisory expertise
Forum on Financial Supervision at LSE overseen by Pedro Duarte Neves and Andrea Enria