Financial Stability
BIS paper looks for nuanced story of 2008 bank failures
Failed commercial banks in the US suffered most from their exposure to non-household real-estate borrowers, rather than traditional mortgages or agency MBS, a BIS economist finds
Payments industry body to implement instant payments in euros ‘by 2017’
The European Retail Payments Board encourages industry body to have a system of instant payments operational by November 2017
Egypt central bank ‘kept eyes on inflation’ as it devalued currency
Head of risk at Central Bank of Egypt says the institution considered wider impact of devaluations on the economy; staff welcomed new governor last week
New Dutch deposit guarantee scheme should ‘disincentivise risk-taking’ by banks
The Netherlands Bank has introduced a new deposit guarantee scheme; scope is wider than old scheme and risk-based, ex ante funding structure aims to dis-incentivise risk-taking by banks
Banking union prompts ‘strategic refocusing’ at EBA
Andrea Enria sees banking union as ‘game changer’ for EBA; sets out three ‘lines of action’ to approach new landscape
Review sees 'fault lines' emerging in global asset management ecosystem
Monetary Authority of Singapore review urges financial industry to remain ‘vigilant’ against emerging risks
Bundesbank calls for harmonisation in CMU response
The Deutsche Bundesbank responds to the European Commission’s capital markets union proposals, calling for greater harmonisation and transparency but warning of burden
PBoC and ECB announce ‘successful’ swap line tests
Tests in April and November provided ‘symbolic amounts’ of euro and renminbi liquidity, involving a ‘limited number’ of counterparties
Policy-makers must drop ‘obsession’ with competitiveness, Cœuré says
Policy-makers must drop their ‘obsession’ with competitiveness and focus on increasing productivity instead, Benoît Cœuré says; researchers need to question assumptions of ‘conventional’ theory
Riksbank steps up debt warnings in stability report
An absence of measures to address high asset prices and rising debt could result in a ‘serious’ shock with ‘great’ consequences for the economy, Swedish central bank warns
ECB flags threat of ‘abrupt reversal’ in risk premia
Latest review identifies two ‘medium-level systemic risks’ to the eurozone's financial stability, weak profitability prospects for banks and a potential ‘sharp adjustment’ in risk premia
Buch keen for macro-prudential tools despite no guarantee of use in ‘near future’
Bundesbank’s deputy president says it is important the authorities have the ability to nip ‘any unwelcome developments’ in the real estate market in the bud, should they arise
Foreign productivity shocks major influence on small, open economies, paper argues
Shocks in large economies, particularly to technology, have a large effect on the business cycles of small, open economies, a Norges Bank working paper shows using a DGSE model
German interbank contagion risk concentrated around four large banks, paper argues
German researchers propose new model to calculate costs of interbank contagion
China permits central banks to trade forex derivatives based on Isda agreements
China allows derivatives trading based on international standard agreement for the first time; applies only to sovereign investors and foreign exchange derivatives
Fed to encourage supervisory staff to air divergent views
Federal Reserve will develop practices encouraging staff to exchange and respond to divergent views in 2016; New York Fed and Richmond Fed boost supervisory resources following review
EBA: European bank capital improving but concerns remain over profits and assets
European banks are improving their capital and leverage ratios but are suffering from low levels of profitability and problems with non-performing loans, transparency exercise finds
Main threat to stability from low growth, says Italian deputy
Fabio Panetta says there is ‘broad agreement’ the main danger to financial stability in the eurozone stems from low growth; credit growth ‘remains subdued’
EC plans full eurozone deposit insurance by 2024
Proposals outline gradual introduction of common deposit insurance in the eurozone between 2017 and 2024; size of fund equivalent to 0.8% of covered deposits, estimated at €43bn
Hungarian central bank buys controlling stake in Budapest stock exchange
Hungary’s central bank buys 68.8% share in country’s stock exchange, saying the move was necessary to ensure adequate flows of capital to domestic businesses
New York Fed’s Musalem: culture is as important as capital
Head of the New York Fed’s integrated policy analysis group highlights potential for ‘dissonant sub-cultures’ at firms that otherwise promoted values and codes of conduct