Financial Stability
Bank of Japan launches updated payments platform
New BoJ-NET system goes live tomorrow, days after launch of China's CIPS platform and RMB surpasses yen as global payments currency
Chinese slowdown could be harder than many economists think, paper argues
Chinese potential growth could be lower and its coming slowdown harder than many think; growth could slow to 5% annually by 2020, says French working paper
Hong Kong authorities look to bring shadow banks into resolution regime
Plans for resolution regime are advancing, with legislation expected by the end of the year; unregulated financial institutions can still be covered by the regime
Swap line availability not assured, warns Bill Allen
It is ‘not certain’ the Federal Reserve will be able to provide liquidity in the same manner in the future, Allen tells Central Banking
Central bankers from small Caribbean states to get IMF training under new deal
IMF to provide training at Washington headquarters to officials from smaller Caribbean states after Central Bank of Trinidad and Tobago offers financial support
BIS paper offers method of overcoming time inconsistency in macro-prudential policies
Macro-prudential policies are necessary to prevent finance amplifying imbalances, but regulators struggle to credibly commit to policies, authors warn
RBA’s John Simon says low rate a ‘poor predictor’ of crises
Low interest rates of themselves did not cause the global financial crisis and have always been a poor predictor of economic instability, senior Reserve Bank of Australia economist argues
European real effective exchange rates are hugely misaligned, paper argues
Real effective exchange rates for European Union countries do not correspond to national economic fundamentals, a working paper from the Bank of Lithuania argues
Rajan weighs inclusion challenges as IMF identifies financial stability risks
Reserve Bank of India governor discusses the driving factors behind inclusion and challenges posed to supervisors in IMF panel, following staff note on macroeconomic impacts
China launches cross-border payments platform
Heavily anticipated China International Payment System goes live, with StanChart and ICBC Singapore announcing successful transactions on new platform
Jamaica must sustain reform, central bank governor says
Jamaica must keep economic reform efforts going for another 15 years, Brian Wynter says; calls for enhancements to role of IMF’s centre for Caribbean technical assistance
Central Bank of Iceland delays report as tensions over failed banks rise
Central bank postpones launch of financial stability report at last minute, citing the need to wait for new information; governor responds to lobby group calling for heavier tax on failed banks
Expected delay to non-EU central counterparty approval risks frontloading panic
Lawyers predict many CCPs will remain in limbo by the current December 15 deadline, which overlaps with the start of frontloading and ups the pressure on banks ahead of clearing requirement
Emerging markets appear less susceptible to global contagion than advanced economies – BIS paper
Working paper explores whether central banks can still manage domestic financial conditions despite globalisation; isolates ‘contagion’ component in bond yield dynamics
Bundesbank paper explores why banks may lend too much
A limited number of banks may engage in excessive lending, and those that do are more likely to rely upon capital support, says Bundesbank paper
DNB director targets better measurement of inclusion
Frank Elderson emphasises the benefits of financial inclusion and says central bank will put forward proposals for financial inclusion index later this week
Failed normalisation could hold back growth, IMF warns
Flagship report presents different scenarios based on whether the normalisation of monetary and financial conditions progresses smoothly or not; process could stall if risks crystallise
IMF sees divergent risks in new outlook
IMF revises growth outlook for this year and next, while noting transformation in risks; Maurice Obstfeld discussed emerging market policy in anticipation of Fed hike
Increases in securitisation may lead to under-pricing of risk, study argues
Increased asset securitisation reduces premia on bonds and equities, Bank of Spain working paper says; decrease in cost of risk may not be related to an actual fall in risk
CPMI launches plan to halt correspondent banking decline
Consultation begins on measures designed to resist the decline of correspondent banking, which is threatening to fragment international payments and damage financial inclusion
RBI deputy urges banks to address asset quality challenges
SS Mundra discusses challenges facing India’s otherwise ‘vibrant’ banking system; asset quality poses challenges to banks and supervisors
Multi-polar system ‘likely’, says ECB executive
Benoît Cœuré considers evolution of global financial system; sees rise of emerging economies leading to greater multi-polarity
Value of capital controls still up for debate
Research published by BIS and IMF points to potential benefits from capital flow measures and macro-prudential tools, but other economists question the results