Financial Stability
Carney hails ‘major achievement’ on resolution stays
Isda protocol signed by 18 major banks aims to solve cross-border legal issues, preventing a ‘cascade of termination events’ that could undermine an orderly resolution
Amro revamped in agreement struck at IMF meetings
Macroeconomic Research Office will become an international organisation when agreement is ratified, 'contributing further to regional financial stability'
Central banks respond to ECB and BoE paper on ABS
Sveriges Riksbank and Reserve Bank of Australia raise concerns over proposals in discussion paper, while Central Bank of Hungary adopts a more positive tone
IMF launches consultation with external advisors on Islamic finance
Fund working group looks to publish ‘staff discussion note’ on Islamic finance before the end of the year and organise a ‘high-level’ conference in 2015
Carney: G-20 summit will be ‘watershed’ in TBTF efforts
BoE governor looks ahead to G-20 meeting next month at IMF seminar on finance and ethics; describes Libor riggers as ‘totally detached’ from the consequences of their actions
Basel Committee toughens bank governance principles
Principles aim to instil stronger risk governance in banks, after FSB peer review identified room for improvement; focus on responsibility of boards and ‘three lines of defence’
Bank of Canada will consult public on future banknote designs
Bank of Canada launches a nationwide consultation on banknote design principles, after a report concluding that Canadians should have increased participation in the process
ECB to release assessment results on October 26
European Central Bank will publish results from asset quality review and stress tests later this month; Draghi says ‘further efforts will be needed’ from some banks
National Bank of Angola separates financial regulation from supervision
Central bank is restructuring its operating model, making a ‘clear separation between the exercise of developing standards and the role of monitoring [their] implementation’
Iceland renovates approach to financial stability
Már Guðmundsson comments on introduction of financial stability council and systemic risk committee in Central Bank of Iceland publications
BoE lifts lid on Scottish independence contingency plan
Plan warned of ‘potential instability’ from use of pound north of the border; central bank prepared emergency liquidity and clear communication strategy in run up to vote
Lars Rhode ‘firmly convinced’ by merits of banking union
The National Bank of Denmark wants to join the banking union, while the government is still assessing the consequences; Danske Bank chief economist supports wait-and-see approach
RBA’s Ellis urges policy-makers to look beyond economics
Head of financial stability says there is ‘a lot’ to learn from other research fields, even if some techniques ‘end up being dead ends for our purposes’
BIS paper tackles redistributive effects of regulation
Working paper studies how regulation tips welfare in favour of the real economy or financial sector, and suggests how regulators might deliver a Pareto improvement
Thailand’s central bank governor warns on risks of US rates normalisation
Prasarn Trairatvorakul warns that US interest rate normalisation could lead to ‘capital flow volatility’, considering it a ‘notable risk’
Portuguese governor calls for powers to act ‘just in time’
Carlos Costa argues that legislative changes are necessary to give national supervisors greater agility when it comes to intervening in failing banks
Buba official warns against tapping ESM for investment
Andreas Dombret says using portion of ESM funds to finance investment in infrastructure would ‘greatly reduce effectiveness’ of rescue fund
Netherlands Bank flags risk from ECB asset purchases
Markets are positive about the ECB's efforts to ease monetary policy, but unconventional measures carry the risk of pumping up asset bubbles, Dutch financial stability review warns
BoJ paper details approach to macro stress testing
Tests feature model of feedback loop between economic and financial sectors, in attempt to gauge the ways in which shocks may reverberate through the economy
Banks should offer ‘equal service’ when facing a run, research finds
Working paper published by the Bank of Portugal analyses models of bank runs, and finds equal service leads to a faster recovery
Bank of Russia sells $1.4 billion to prop up ruble
Central bank intervenes in foreign exchange market to support currency as it continues to slide against the US dollar; commentators split over prospect of rate hike
Basel Committee finds banks’ op risk frameworks lacking
Review finds systemically important banks have made ‘insufficient progress’ in implementing op risk principles; Committee outlines recalibrated versions of its op risk capital models
Polish paper explores market perception of sovereign credit risk
Working paper finds macroeconomic and institutional developments were 'weakly correlated’ with market perception of sovereign credit risk in eurozone during crisis
Central Bank of Ireland proposes lending restrictions
Irish central bank proposes three ‘speed limits’ on banks’ mortgage lending, as it looks to create a ‘stable and well-functioning’ market