Micro-prudential
Book notes: Shadow banking in China, by Andrew Sheng and Ng Chow Soon
The authors dispel many myths about shadow banking in China – but may underestimate future risks, writes Michael Taylor
BoE’s Woods: firms favour ‘transitional’ Brexit period
Prudential Regulation Authority chief quizzed on best course of action for financial firms during Brexit process; “preferential” market access is not necessary, but seems sensible, he says
Singapore fines two foreign banks for 1MDB-related breaches
Investigations continuing into Goldman Sachs’ role, the regulator says
EU could impose negative rate shocks via IRRBB rules
EBA guidance on shocks is “outdated”, says ECB official
Big data could create divisions in society – FCA’s Bailey
UK FCA chief says in some ways more accurate modelling of behaviour is a good thing, but it could also be damaging in terms of access to insurance for some groups
Bank of Canada paper explains decision to dilute ELA solvency requirement
Economists say emergency liquidity can play an important role in a resolution process, which led the Bank of Canada to amend its rules to allow for temporary insolvency
European supervisors publish new anti-money laundering guidelines
Some firms concerned over national supervisors’ ability to regulate money laundering risks
ECB sets out protection scheme monitoring guidelines
Central bank aims to harmonise national practices across eurozone
EBA raises concerns over banks’ implementation of IFRS 9
Profit and loss volatility likely to rise due to new credit risk guidelines, banks say
Irish central bank levies record fine for AML and CFT breaches
Failures occurred over “extended period of time”, central bank says; case highlights need for controls over outsourcing of AML/CFT functions, says enforcement chief
‘Overoptimism’ a factor in house price bubbles, Danish paper finds
Authors highlight how sentiment can become “decoupled” from economic fundamentals under certain circumstances
Andrew Bailey looks to reboot UK conduct regulator’s ‘mission’
New chief executive seeks to clarify approach after stumbles in past years, admitting global understanding of conduct regulation still at an early stage
ECB's bank watchdog warned on NPL clean-up drive
SSM may need clearer enforcement process to boost bad loan provisioning, says regulator
Asia resolution rules risk conflict with G-Sib home regulators
Branches fear local regulators could ask banks for confidential home market information
Irish central bank issues first fine under ‘related parties’ code
Case is first brought under code governing deals with “related and connected parties”
Singaporean and Swiss regulators move against merchant bank in 1MDB scandal
Senior management pressured staff to ignore anti-money-laundering regulations, reports say
Global sharia standards desirable, but impractical – Lebanon’s el Gemayel
Complete standardisation impractical, but other options are available, says Central Bank of Lebanon’s Joëlle el Gemayel; Islamic banking landscape is shifting
RBNZ floats idea of bank regulatory dashboard
Bringing regulatory disclosures together in one place could impose market discipline and allow more straightforward comparison of risks, central bank says
Liquidity stress testing ‘essential’ – ECB supervisor
Supervisor warns conference that banks will need to shape up their internal liquidity adequacy assessment process responses for 2017
Russian central bank closes eight lenders and reports alleged crimes
Six banks and two credit institutions were shuttered by Russia’s central bank in September; dossiers on alleged “crimes” at six more sent to prosecutors
IMF's systemic risk findings called into question
Financial connectedness measure “not usually sharply aligned with systemic risk”, says Darrell Duffie
‘Neural network’ could help construct early warning systems – Colombian paper
Model can detect identity of bank by analysing features of its balance sheet, which the authors say can be coupled with other financial stress indicators to help classify banks by their fragility
Ukrainian central bank complains of failure to prosecute banking offences
Deputy governor criticises failure to bring “high-profile” court cases against suspected financial criminals; IMF has yet to announce whether it will disburse next tranche of aid
Borrowers’ characteristics are key to successful mortgage restructuring, paper argues
How mortgage was restructured is less important than distressed borrowers’ own characteristics in determining whether loan is repaid, Bank of Ireland paper says