Financial Stability
SSM offers best chance of successful regulation, says Cyril Roux
Irish regulator-in-chief says supervisory authorities suffer from in-built weaknesses that the SSM may go some way to overcoming
RBI consults on treatment of domestic systemically important banks
Reserve Bank of India releases proposals for identifying domestic systemically important banks and increasing their capital requirements; state-owned banks may need capital injections
Norges Bank issues ‘secret' advice on prudential regulation
Norwegian finance ministry will publish central bank recommendations on countercyclical buffers only once it has decided whether or not to follow the advice; bank holds interest rates at 1.5%
Basel capital ratios lost credibility during crisis - Atlanta Fed paper investigates
Working paper says reliance of the Basel standards on overstated asset values in reported equity capital caused capital adequacy ratios to lose credibility with financial markets
Knot backs simple regulatory rules
Dutch central bank president says regulatory simplicity would make it easier for supervisors to detect risks and central banks to ‘promote’ financial stability
UK's financial regulator backs end to mortgage lending programme
BoE's Financial Policy Committee wary of the impact of higher interest rates on banks' and households' balance sheets; recommends mortgage lenders be required to heed stress test guidelines
Financial literacy in France is correlated with political engagement, study finds
Working paper finds middle-aged men are the most financially literate demographic; little difference between different political orientations, but the disengaged score worse on the test
Constâncio predicts ‘gradual decline’ in size of eurozone banking sector
European Central Bank vice-president says companies will increasingly turn to capital markets instead of banks for their financing needs
Uncertainty constrains credit supply, IMF paper finds
Working paper tests the theory that uncertainty would reduce the supply of loans in an economy, and finds it holds true - especially for smaller credit institutions
Design of Norwegian banknotes charts new waters
Norges Bank reveals upcoming banknote series will share a maritime theme, reflecting the country's 83,000km coastline; notes will not feature human portraiture
Sveriges Riksbank calls for higher risk weights on mortgages
Central bank's latest financial stability report supports regulatory proposal to raise minimum amount of capital banks must back up housing loans with from 15 to 25%
CLS raises £160 million capital from shareholders
Hefty capital raise completed last week to enable CLS to meet demanding new capital requirements and support future growth
Eurozone household debt varies based on institutions, paper finds
Repossession periods are the strongest single determinant of the distribution of secured debt in different member states of the eurozone, with fewer borrowers where repossession periods are longer
Taiwan allows Chinese issuers in offshore RMB bond market
So-called Bao Dao bonds are expected to find a ready market eager for yield; offshore RMB bond market in Taiwan has seen just six issuances so far this year
BoE's Carney: liquidity support for CCPs is a 'last-resort option'
Bank of England governor insists clearing houses must have enough liquidity to cope with the default of two big member firms
Shariah principles will engender financial stability, says Zeti
Bank Negara Malaysia governor Zeti says Shariah principles, if properly adhered to, will help Islamic finance make a positive contribution towards overall financial stability
ECB paper says global economy still haunted by ‘spectre of protectionism’
Researchers at the European Central Bank find evidence that countries still regress to trade protectionism in the face of recessions or loss of competitiveness; call for international peer pressure
Mersch defends ECB’s Chinese walls
European Central Bank executive board member Yves Mersch says plans to keep monetary and supervisory functions separate will ensure any ‘conflicts of interest’ are avoided
Swiss paper dissects asset price responses to economic news
Researchers find the relationship between asset prices and economic news is shaped by the prevailing economic conditions – including policy rates and perception of risk
Irish governor backs domestic and export banking separation
Patrick Honohan says that, by keeping the export and domestic banking sectors separate in small countries, authorities can avoid having to put a cap on the size of banks’ balance sheets
New Zealand payment systems under review
Reserve Bank of New Zealand announces review of its two large-value settlement systems; expects to sanction ‘significant upgrades’ to both within the next four years
Zambian governor says tougher capital rules will help foster financial inclusion
Michael Gondwe says recent increases in the minimum capital requirements imposed on domestic and foreign banks will make them stronger and improve the supply of credit to ‘local entrepreneurs’
Bank of England terminates mortgage support
Funding for Lending Scheme will cease subsidising mortgages in 2014; Mark Carney outlines tools the central bank could use to rein in the ‘growing momentum’ in UK housing market
Lithuania on track to join euro at second time of asking
The Bank of Lithuania has started publishing regular forecasts that keep track of the country’s progress towards meeting the convergence criteria necessary for accession to the eurozone