Financial Stability
Research promotes regional approach to financial stability in Asean
IMF working paper says it is ‘equally important’ as regulatory harmonisation; sees potential for vulnerabilities as countries with lower credit-to-GDP ratios catch up with their neighbours
Greek debt deal marks start of rough road
Negotiations on Friday ended in a compromise stacked in Germany’s favour; although disaster has been temporarily averted there are more battles to come, and Greece’s funding remains tight
Richmond Fed paper examines triggers for contingent capital conversion
Working paper finds the desirability of a regulator or fixed-price mechanism depends on the effect the conversion has on the value of equity to the incumbent owners
BoE research finds high-frequency trading makes prices more efficient
High-frequency trading, although correlated, appears to be based on information and therefore helps markets form prices efficiently, working paper finds
More reforms needed to tackle CCP risks, warns IMF paper
Significant risks remain despite efforts to improve the resilience of central counterparties, IMF working paper warns; direct access to central bank facilities would help
Bank structure affects macro-prudential spillovers, BoE research finds
Working paper finds macro-prudential policies spill across borders more readily to bank branches than subsidiaries, although the change depends on type of lending and type of policy
NBER paper finds shareholder protection dampens crises
Stock markets provide emergency source of funding during banking crises, and the shock-absorbing effect is stronger if shareholders are better protected, working paper finds
Fed’s Powell sets ‘high bar’ for leaning against credit cycles
Governor Powell says leaning against the cycle through supervisory policy would ‘almost surely interfere’ with traditional function of capital markets
Bank of Canada research underscores need for securitisation reform
Working paper warns asymmetric information impairs market functioning and means risk-sharing is not enough to efficiently allocate securitisations
Banks claim trading book rules will hit hedges
Regulatory measures of risk would leap 133% for some positions, warns ING, as regulators press ahead with plans to limit diversification benefits
Greek crisis meeting gets go-ahead despite German challenge
A meeting of the Eurogroup will take place Friday after Greece yesterday sought a six-month bailout extension, but Germany has moved quickly to challenge the proposed compromise
Swift in talks with Fed and ECB on real-time payments
Swift’s Juliette Kennel and Carlo Palmers talk to Central Banking about the company's leap into real-time payments in Australia, and discuss launching similar systems in other countries
Bank of Canada will only lend renminbi as ‘last resort’
The central bank’s financial markets chief says it is up to banks to manage their renminbi liquidity needs, including in ‘stressed circumstances’
Riksbank unveils new series of notes and coins
Majority of Sweden’s banknotes and coins to be updated by the end of 2016; new 20 krona note to be introduced and two krona coin to re-enter circulation
Latest round of Greek bailout talks collapses
Discussions over extending Greece’s bailout collapsed late last night after the country's finance chief Yanis Varoufakis rejected a plan by the Eurogroup to continue with the current programme
Macro-prudential policies can ‘tame’ the financial sector, says ECB's Constâncio
Monetary policy should be used to control the price of goods and services not asset prices; macro-prudential policies can address financial imbalances in spite of dearth of shadow banking tools
Australia opts for ‘tactile’ notes to assist the visually impaired
Australia follows Canada in offering tactile features on polymer banknotes despite apparent rejection of the idea by the Bank of England
MAS takes first steps towards crowdfunding regulations
Proposed regulations aim to strike a balance between encouraging a valuable source of finance for small businesses and managing the high risks associated with securities-based crowdfunding
IMF too sluggish to be global lender of last resort, say Allen and Moessner
The IMF’s response to the financial crisis was too weak and too late, leaving the Federal Reserve to pick up the slack, William Allen and Richhild Moessner argue in the Central Banking Journal
Justin Lin on China, economic growth and the international monetary system
Former World Bank chief economist on why a multiple currency system could increase monetary instability, China should be wary of full capital reform and infrastructure investment will boost growth
Reviving the faltering euro economy
There are three options to address Europe’s core problem: real differences in production costs. None of them involve asset purchases by the European Central Bank, writes Allan Meltzer
Evaluating the IMF’s performance in the financial crisis
The results of the IMF’s Independent Evaluation Office investigation into the Fund’s handling of the global financial crisis are deeply flawed.
Book notes: Don’t start from here, by David Shirreff
A pointed, passionate plea for a simpler banking system that deserves to be taken seriously
Book notes: Emerging Africa, by Kingsley Moghalu
Sub-Saharan Africa is no basket case, but neither is it poised to follow China and India on their meteoric economic rise, Kingsley Moghalu argues in his forthright book