Financial Stability
Frontier markets need framework to strengthen capital flow resilience – IMF paper
Frontier markets are affected by capital flows in similar ways to emerging markets, the paper argues, suggesting a change in the “landscape” of capital flows could have policy implications
RBI’s Mundra hopes to boost credit to small businesses
Deputy governor outlines “ABCD” of issues affecting small businesses’ ability to access credit, including better access to information and new forms of collateral
Mervyn King on Brexit, crisis supervision, economic rebalancing and reforming the IMF
The former Bank of England governor discusses Brexit, radical regulatory reform, the difficulties rebalancing the European and global economies and an overhaul of the International Monetary Fund
IMF working paper encourages Italian banks to clean up balance sheets
Italian banks are likely to become more profitable as economy recovers, authors say, though their capacity to lend is linked to capital buffers
Nepal Rastra Bank broadens electronic payments oversight
Banks and financial institutions will have to re-register with the bank under new licensing law; central bank hopes reform will support more non-banking institutions and new payment transactions
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
CPMI-Iosco issues report on key data for future derivatives reporting
Report sets out working group’s proposals for how OTC derivatives products should be reported to trade repositories using unique identifiers
CFTC charges Deutsche Bank with reporting code violations
US regulator files legal complaint against Deutsche Bank for swap reporting violations; complaint is latest blow to German giant’s US operations
MAS looks to overhaul payment systems
City state already has access to some of the world’s most advanced payment systems, but cash and cheque use remains high; MAS hoping to improve governance, regulation and technology
Regulations gave eurozone banks incentives to downplay credit risks, paper argues
Bank of Slovenia paper analyses whether banks correctly assessed corporate borrowers’ creditworthiness before the financial crisis, and what incentives they faced
Definitions matter when using DTI ratios – Riksbank paper
How regulators define debt and income can affect the outcome of financial stability analysis and the use of macro-prudential tools, authors say
Data gaps hamper work on emerging market vulnerabilities – BIS paper
Large debt stocks, particularly in foreign currencies, point to vulnerabilities in some emerging markets, but gaps in the data are hampering analysis, BIS economists say
FSB fleshes out guidance on resolution
Reports add detail on emergency funding needs for global banks and maintaining the continuity of critical services during resolution; most standard-setting work expected to be finished in 2017
RBI’s Mundra says banks must evolve or face extinction
Deputy describes “dismal future” for banks, saying they must embrace a socially responsible approach if they are to avoid the threat posed by fintech firms and other non-banks
RBI should improve link between analysis and macro-prudential policy – FSB review
The Reserve Bank of India should consider regular financial stability meetings to set policy, and it needs to support its decisions with deeper analysis, a peer review finds
Long-run financial market volatility has strong effects on real economy, researchers say
A Bank of England working paper presents a method for breaking financial market volatility into long- and short-run components; long-run volatility closely linked to economic fundamentals, authors say
Belarus central bank reports ‘significant’ credit risk to country’s banking sector
A large proportion of Belarusian banks’ risky debts are owed as a result of financing government, central bank says; report echoes IMF call for major reforms to state-owned enterprises
Korea needs right kind of banking competition – quarterly bulletin
Competition can harm welfare if it is focused on gaining market share through a price war, authors say; Korean system may benefit from greater diversity
Paper outlines methods for creating country-specific banking crisis prediction models
Working paper tests models with country-specific and state-dependent parameters on a sample of 14 European countries; approach out-performs traditional early-warning models, researchers argue
Tajikistan objects to Basel Institute’s anti-money-laundering criticisms
The Basel Institute’s grading of Tajikistan as the third-worst money laundering jurisdiction in the world is based on an “absolutely incorrect analysis”, the country’s central bank says
Philippines leads improvement in Brookings financial inclusion rankings
The Central Bank of the Philippines says rapid progress last year reflects the success of its financial inclusion strategy; Brookings report highlights the importance of a wide-ranging approach
Solomon Islands’ Rarawa praises ‘innovative’ financial inclusion plans
Financing initiative for coconut industry promises to extend “digital banking penetration” in the Pacific nation, governor says
Basel reports target gaps in CCP resolution framework
Reports by CPMI-Iosco and FSB find there are still gaps in CCPs’ implementation of recovery and risk management principles and regulators need to think more about resolution planning
Islamic finance becoming ‘mainstream’ in Malaysia – BNM’s Ibrahim
Governor says Islamic finance has gone from a handful of firms to a quarter of the market in a matter of years; “pragmatic” approach may be part of success