Financial Stability
BIS paper says liquidity regulation should not replace lender of last resort function
Lender of last resort and liquidity regulations perform separate roles, and therefore one cannot replace the other, working paper says
VAR limits: dislocations put focus on other lines of defence
Dislocations in the Swiss franc and the US Treasury market have highlighted the limitations of standard regulatory capital models, but banks insist their other lines of defence are up to the task
RBA research sets out stress test for households
Model emphasises dangers of relying on aggregate measures of household indebtedness when assessing financial stability and setting monetary policy
EBA offers advice on determining ‘critical functions’ in resolution
Technical advice seeks to clarify EU resolution directive in setting out exactly which parts of a bank are essential for financial stability; bank resolution plans found to be lacking in some areas
EU exit not disastrous to UK investors, Lamont says
The former Conservative chancellor says fears of financial turmoil in the UK after an EU withdrawal are exaggerated
US banks hold up under Fed stress tests
Latest annual stress tests show 31 largest bank-holding companies would lose $490 billion under the Fed’s severely adverse scenario, which has been tightened compared to 2014
RBA mulls creation of repo CCP
Australia currently lacks a CCP for clearing repos, which could be exacerbating systemic risk and impairing market functioning, but previous efforts met with little enthusiasm
Spanish deputy favours ‘moral persuasion’ in supervision
Fernando Restoy believes supervisors should have the ‘ability to influence the decisions’ of the managers of the entities it oversees through ‘moral persuasion’
FSB-Iosco tweaks systemic shadow bank definition after criticism
Initial proposals for identifying systemic ‘non-bank non-insurers’ ran into criticism last year, with asset managers complaining rules put too much emphasis on size
Court rules against ECB in CCP case
European court finds ECB does not have authority to regulate securities clearing systems in the EU, upholding a UK plea against rules forcing CCPs to be located in the eurozone
Sarb deputy governor fears for oil-exporting countries
The positive and negative shocks of falling oil prices are ‘asymmetric’ and the impact on oil-exporting countries could ‘elevate’ global financial stability concerns, warns Groepe
Yellen sees ‘room for improvement’ on risk management
Fed chair says banks have strengthened their risk management, internal controls and governance, but more can be done and supervisors will be ‘watching closely’
Largest banks clear Basel hurdle for first time
Latest monitoring report finds large internationally active banks all now meet minimum capital requirements; EBA sees capital falling under full implementation of European requirements
ECB revisits virtual currencies in new report
Research concludes virtual currencies do not pose ‘material risk’ to central bank operations in eurozone, but could if they become more widely used or entwined with the real economy
Uganda governor troubled by effect of low oil prices on public finances
Uganda must have a ‘far-sighted long-term fiscal policy’ that recognises the threat falling oil prices pose to the health of public finances, argues central bank governor
Carney targets 'strategic’ approach to market intelligence
BoE governor Mark Carney sheds light on some of the recent changes to the way the central bank gathers market intelligence in Treasury Select Committee hearing
EU court to rule on UK challenge to ECB's clearing policy
Verdict due on March 4 in first of three UK complaints about eurozone clearing oversight; ECB policy calls for some firms clearing euro-denominated products to be incorporated in the eurozone
Angolan central bank rejects public designs for new coins
Applicants failed to meet the requirements of the competition launched for the design of two new coins. The National Bank of Angola will now develop the motifs of the 50 and 100 kwanzas
RBI director calls for ‘strong law’ against cyber crime
A strong law help increase the confidence of the average person on the street in using technology in financial transactions, argues RBI executive director
First CPMI-Iosco peer review finds gaps in trade repository principles
Peer review of Principles for Financial Market Infrastructures in Europe, Japan and the US finds jurisdictions have made good progress with CCPs, but gaps remain among trade repositories
RBI official says India corporates need to increase forex hedging
Potential US rate rise puts rupee depreciation back on the table; executive director at RBI raises concern over corporate balance sheets
Riksbank research gives alternative finance a cautious welcome
Greater diversity of funding sources stands to bring major benefits to the real sector, but financial stability could be at risk if new products are not well understood