Financial Stability
Repeat of Asian crisis ‘unlikely’, say Singapore bank chiefs
Policy-makers are responding more proactively to risks than in 1997, they say, while economies are seen as much stronger
EBA plots shift to new phase of work
As European banking legislation is finalised, the institution plans to concentrate more on harmonisation and less on standard-setting; expanding workload contrasts with shrinking budget
PRA plans to subject ‘other systemic institutions’ to tougher scrutiny
Institutions designated as O-Siis would face tighter scrutiny and be expected to produce resolution plans, with the potential for further measures in the future
Ireland’s Gerlach points to indirect impact of macro-prudential tools
Deputy governor says evidence suggests LTV and LTI tools are having the strongest effect via indirect channels, rather than their direct impact on credit, although the tools are still new
Sovereign debt holdings ‘significant’ driver of insurer risk, Bundesbank paper says
Insurance companies at risk from holdings of sovereign debt, and current regulation does not adequately deal with problem, paper argues
Outlook for emerging markets not as ‘gloomy’ as people think, BoE’s Forbes says
Bank of England MPC member Kristin Forbes warns pessimism may be ‘overshadowing important differences across countries’ and strengths in some economies
MAS's Menon hails local alternative to cash
MAS director says Singapore's electronic transfer system potentially 'safer and cheaper' than notes and coins; wants people to be able to make payments using social networks
More polymer banknotes in new Nicaraguan series
Nicaragua to use polymer substrate on two additional denominations in new series launched later this month; revamp costing over $17 million
Iosco, Asifma officials urge early global co-operation on future rules
Joining forces early on would improve regulatory cohesion between countries, but post-crisis pressure on national rule-makers to legislate poses problems, it is suggested at Hong Kong conference
ECB paper explores fiscal adjustment in stressed countries
Fiscal corrections have been ‘more costly’ in contractionary times in Greece, Ireland, Portugal and Spain over the past 50 years, paper suggests
Jamaican governor defends update of central bank act
Amendments would give central bank new responsibility for financial system stability; Brian Wynter argues it is not designed to turn the institution into a ‘super-regulator’
BoE unveils final plans for ring-fencing banks
Consultation sets out how bank holding companies should structure themselves to comply with legislation on ring-fencing, but a decision on extra capital buffers is yet to come
Eurosystem to consider Target2 and T2S merger
Yves Mersch says officials will look into the potential for consolidating some components of the payments and securities settlement services; potential for one unified platform
Blanchard and others look to reconcile theory of capital flows with practice
Revamp of Mundell-Fleming model helps explain apparently contradictory results, with important implications for policy-makers looking to respond to capital flows
Eurozone policy-makers and researchers puzzled by trends in long-term inflation expectations
Eurozone inflation more strongly influenced by inflation expectations, the ECB notes; two central bank working papers say data shows unexpected changes
Macro-prudential tools can influence inflation, Menon says
MAS managing director outlines interaction of prudential tools and monetary policy, saying Singapore deliberately used macro-prudential tools to help lower inflation
BoE’s Sharp wants FPC powers over buy-to-let market
UK Treasury will consult on the prospect of handing the FPC powers of direction over buy-to-let lending; external FPC member in favour
Swedish economists add voices to criticism of leaning against the wind
Current and former Riksbank deputy governors Martin Flodén and Lars Svensson warn against the large rate hikes necessary to address financial stability concerns
Eurosystem’s asset purchase programme should increase growth by 1% annually, paper says
The Eurosystem’s asset purchase programme could increase growth and inflation by 1% annually for two years, a working paper from the Bank of Italy predicts
Developing country central banks cannot rush into full independence, Botswana governor says
Botswana’s central bank governor tells an IMF seminar developing country central banks need to move carefully towards independence on price stability
Ingves laments complexity in Basel trading book
Basel Committee chair says he would have preferred a simpler approach to market risk; work on other risks will tend towards greater simplicity, and will likely include external credit ratings
Financial Stability Board should define shadow banking, Irish market supervisor says
Financial Stability Board is the best body to give regulators a clear definition of the shadow banking sector, says the Irish central bank’s director of markets supervision
Central bankers challenge Caruana on leaning against wind
IMF panel displays broad range of views on interest rates as a financial stability tool – but none of the central bankers are willing to go as far as the BIS general manager