Micro-prudential
State Bank of Pakistan sees financial sector ‘flourish’
Financial stability review highlights record after-tax profit and high capital adequacy ratio, as well as improvement in asset quality
Danish central bank urges Basel to rethink parameter floors
Lars Rohde warns parameter floors in IRB approaches could create an incentive for greater risk-taking in some markets, in response to Basel Committee consultation
SSM challenges eurozone banks to improve governance
Supervisor warns most significant banks in eurozone fall short of international best practices; presents lessons from assessment of management bodies and risk appetite frameworks
Rajan urges completion of bank cleanup
Outgoing governor argues actions taken to address public sector bank balance sheets must be taken to their “logical conclusion”; encourages government to provide capital injection
Flug sets out ‘change in philosophy’ on new banks
Bank of Israel governor sets out measures adopted by banking supervision department to make it easier to start a bank from scratch; part of broader competition drive in the country
Irish banks prepared for Brexit but face material effects, deputy says
Effects on profitability and business models could be ‘material’ if UK votes to leave EU, Irish deputy warns, though central bank is satisfied with short-term contingency planning
RBI approves new method for restructuring stressed loans
Indian banks will be able to split some of their largest stressed loans in two; rules introduced as RBI looks to help banks achieve “clean and fully provisioned bank balance sheets” by March 2017
Swiss regulator forms resolution division
Regulator hopes to focus its efforts by uniting disparate teams in a new division, with current enforcement chief David Wyss becoming head of resolution
Irish bad bank shifts focus to delivering new property
National Asset Management Agency is shifting its focus to projects aimed at developing commercial and residential property; asset disposals to be reduced in scale as body winds down
Ukraine closes three further banks, offers reassurances on another
Ukrainian central bank closes down three medium and small commercial banks, while attempting to calm fears over the country's largest bank
Regulators sanction Swiss bank over links to Malaysian government fund
Swiss regulators impose range of measures on bank for breaching anti-money-laundering regulations; MAS will withdraw bank’s licence to act as merchant bank in Singapore
ECB looks to add eight more O&Ds to guide
European Central Bank proposes guidance on the application of another eight options and discretions in banking supervision; public consultation will run until June 21
EBA sees stability risk in Commission ratings proposal
European Banking Authority criticises Commission’s proposals on use of credit ratings’ agencies judgements by regulators; amendments would ‘increase risk to financial stability’, it says
IMF urges San Marino authorities to tackle NPL problem
Staff encourage a policy based on stocktaking, provisioning and recapitalisation; central bank may needs outside help with AQRs, they suggest
ECB to conduct comprehensive assessment of four more banks
European Central Bank is assessing four banks it may come to directly supervise; supervision fees charged to European banks set to rise over 45% in 2016
IMF staff weigh options for tackling Chinese NPLs
Technical note authored by three IMF employees considers how securitising NPLs or converting them to equity might work in the Chinese context; latest CBRC figures show the stock is growing
Book notes: Lehman Brothers: a crisis of value, by Oonagh McDonald
McDonald's book offers a useful synopsis of the multiple failings at Lehman Brothers running up to 2008, but ultimately fails to add significantly to what was already known
BoE’s Cunliffe notes ‘gap’ between bank return and investor expectation
Investors should be prepared for lower returns in the coming year, Bank of England deputy says; risks to the housing market show signs of reducing but FPC poised to act if necessary
Time ‘ripe’ to consolidate public banks – RBI’s Gandhi
Consolidation could help banks spread their risk and compete on a global scale, deputy governor says – though they may need a “nudge” from government to get going
BoE paper seeks unified global approach to NPLs
A multidisciplinary approach to legal, accounting, statistical, economic and strategic elements of loan loss provisioning and NPLs
Hoenig warns reliance on long-term debt could represent systemic vulnerability
FDIC vice-chairman warns of danger of substituting long-term debt for equity and comments on disagreement with Fed over ‘living wills’
FinCoNet offers regulators chance to advance financial consumer protection – chairman
The association of national financial consumer protection agencies has made progress in supporting reform, but has considerable work ahead, chairman Sheridan says
Troubled Kenyan bank to reopen under new management
Chase Bank will be managed by Kenya Commercial Bank, which may go on to acquire majority stake; questions raised over pressures on small and mid-sized banks
Basel Committee opts for local discretion on rate risk
Committee abandons attempt to create common global standard for interest rate risk, opting instead to leave discretion with banks and supervisors in final standards