Financial Stability
PBoC highlights ‘rapid’ growth of electronic payments
Quarterly report on payments in China says electronic payments, particularly mobile payments, grew significantly in Q3
EU insurance stress tests reveal industry vulnerability to ‘Japanification’
Firms are vulnerable to a prolonged low interest rate environment and asset shocks, stress tests run between April and July show
Swift wins Australian real-time payments contract
Contract represents new direction for the financial messaging service, with the final platform expected to go live in 2017
National Bank of Angola works on deposit guarantee fund
National Bank of Angola has built a framework for a deposit guarantee fund in the country, which the governor says will cover ‘around 90% of depositors’
Nepalese governor sets sights on regional capital market
Yuba Raj Khatiwada identifies market infrastructure and corporate bonds as two key areas for development as Asia works towards greater capital market integration
Spain looks to create $7.5 billion resolution fund
Spanish government publishes draft bill that will transpose the BRRD into national law and establish a national resolution fund, in preparation for the SRM
PBoC closes in on liberalisation with deposit insurance plan
Central bank moves closer to deposit rate liberalisation with proposals for deposit insurance fund, aiming to improve ‘discipline’ in banking sector and encourage smaller banks to compete
BoE researchers posit dual model of interbank markets
Working paper separates exposures from funding to show the two parts of the interbank market have different structures; large ‘core’ banks present contagion risk
BoE paper says loan fair value techniques come with 'health warnings'
Researchers say it is unlikely that any one technique will capture all relevant aspects of valuation across all types of bank loans
ECB research explores use of NSFR as macro-pru tool
Economists consider how the net stable funding ratio could be used to tackle the build-up of systemic liquidity risks; research is still at an early stage
Bank of Finland paper sees inefficiencies driving China’s internet finance
Boom in internet finance presents stability risks and appears to be the result of inefficiencies in the existing financial system; authors recommend market-based reforms to redress the balance
New payments regulator in UK may have uneasy relationship with BoE
Treasury committee highlights potential for conflicting objectives between newly formed payments regulator and the Bank of England; Tyrie says independence ‘pretty heavily circumscribed’
Malaysian banks will use cheque fees to incentivise electronic payments
To reduce the use of cash and cheques in the financial system, Bank Negara Malaysia is introducing a scheme whereby cheque fees will be used to incentivise e-payments
ECB fears ‘abrupt reversal’ of global search for yield
Central bank says an end to the hunt for yield is the main threat to financial stability in the eurozone; Constâncio concerned by impact on investors’ balance sheets
Linde says Bank of Spain retains ‘important role’ in SSM
Bank of Spain governor says national central banks will play a vital role in the conduct of banking supervision under the new system
Constâncio wants to ‘broaden’ European macro-prudential toolkit
ECB vice-president wants a broader macro-prudential toolkit to help smooth the financial cycle, including new instruments for the shadow banking sector
Rajan faults 'big borrowers' for eroding 'sanctity' of debt contracts in India
RBI governor calls for ‘change in mindset' where the ‘wilful defaulter' is ‘justly chastised as a freeloader' on hardworking people
Bank of Portugal gets new powers to assess bank directors
Bankers’ current court cases and their personal business conduct are now also part of the Bank of Portugal's assessment of the banking system
BoJ’s Nakaso sees opportunities for payments innovation
Options on the table include 24-7 real-time payment systems, improved cross-border linkages and better financial messaging systems
Malaysian banks working on a Swift rulebook for Islamic transactions
A Swift rulebook ‘will provide an efficient platform for the exchange of messages for Islamic finance transactions’, says governor of Bank Negara Malaysia
Global housing trends can predict domestic financial stability – Norges Bank paper
Crisis probability increases markedly when ‘bubble-like behaviour' in the housing and credit markets coincides with high leverage, research shows
Riksbank study questions status of cash as legal tender
Researchers warn ‘lock-in effect' may inhibit market participants from exploiting more efficient payment methods
Bundesbank explores macro-prudential framework
Claudia Buch says the central bank is 'looking into' what needs to be done to provide a legal basis for macro-prudential policy; Bundesbank releases financial stability review
ECB’s Cœuré calls for 'deeper analysis' of CCP crises
Benoît Cœuré warns questions still remain in the area of CCP failure; highlights needs to consider impact of multiple CCPs entering recovery at the same time