Financial Stability
BoE report sheds light on Covid market operations
Surge in scale and frequency of operations amid switch to work from home created “issues”
Pandemic is top stability concern for benchmark respondents
House prices, cyber crime and crypto assets are also major worries for central banks
Larry Summers on stagflation risks, lessons from Delphi and never-ending ‘punch’
Ex-US Treasury head speaks about fiscal ‘overexpansion’, Fed/Treasury debt discord and ‘unknown unknowns’
Many benchmark respondents concerned over AML/CFT risks
Participants based in Americas especially concerned over rise in money-laundering risks
Czech governor calls finance minister ‘incompetent’
Rusnok rejects finance minister’s criticisms of rate rise as general election draws near
Stark differences between financial stability department resources
Powers may be more important than staff numbers and budget to carry out function
More macro-pru tools needed, say some central banks
Some benchmark respondents say they lack legal framework for macro-prudential powers
Emerging market central banks regulate more sectors
A higher proportion are the sole banking, non-bank and micro-finance sector regulators
FSB relaunches global surveillance framework
New approach aims to be more systematic and reflect FSB’s “broad membership”
Afghan central bank ‘worsened crisis’, says leaked document
International officials allege “mismanagement” under Ahmady led to loss of dollars
Emerging nations favour different macro-prudential tools
Respondents from richer countries use counter-cyclical buffers more than emerging market peers
Many central banks are sole macro-pru agency
Two-thirds of respondents say central bank alone can impose macro-pru restrictions
Singapore and Malaysia to link payment systems
Regulators see potential of using distributed ledger technology in cross-border payment linkage
Wide range of financial stability arrangements among central banks
Boards are prime financial stability decision-making body at many participants
UK looks to boost long-term investing
Working group says action needed to encourage illiquid investing without risking instability
Authorities should consider stress-testing global supply chains – BoE paper
While global supply chains have not changed much, the shocks impacting them have, researchers say
Banks resolved in almost half of jurisdictions surveyed
Jurisdictions with more bank resolutions had higher NPL levels, benchmark exercise finds
RBNZ to tighten housing loan limits in November
“House prices remained unsustainable” despite earlier action, New Zealand governor Bascand says
Swedish central bank may join Eurosystem payments platforms
Sveriges Riksbank says Target2 and T2S could enhance policy but has security concerns
Stress tests key for financial stability – Benchmarks participants
Most Benchmarks participants conduct stress tests more than once a year, but methods vary
BoJ holds rates as Japan waits for new prime minister
Central bank warns of possible financial problems from persistent Covid-19
UK’s PRA ‘re-tooling’ for post-Brexit world – Woods
Chief executive says reform efforts complicated by hasty “on-shoring” of EU rules
Cyber security exercises useful, say benchmark participants
Over half of participants simulate cyber attacks – a quarter do so more than once a year
Agustín Carstens on BIS strategic priorities, innovation and central bank policy
BIS chief speaks about policy trade-offs at a critical time, tech collaboration, tackling NBFIs and the dearth of ‘green’ assets