Financial Stability
Volcker rule in its ‘purest form' necessary to curb derivatives speculation
Under pressure from banks and hedge funds, the definition of ‘hedging' in the final Volcker rule could be so broad as to allow unchecked speculation dressed up as hedging, Vembar Ranganathan argues
Eastern Caribbean Central Bank takes over Anguilla’s largest two banks
ECCB steps in as banks’ capital positions deteriorate; Anguilla’s chief minister looks to the UK government for public and private investment in wider economy
Bofit paper says depositor sensitivity to market rumours increased in crisis
Bank of Finland discussion paper analyses market discipline in Central European countries; finds depositors were increasingly influenced by market rumours during the financial crisis
Monetary policy and macro-prudential measures can make a ‘vicious circle'
Central banks must assess the risks of monetary and macro-prudential policies pulling in opposite directions and creating adverse outcomes, says former BoJ deputy director-general
RBA expects co-ordination over international clearing mandates
The Reserve Bank of Australia’s Jenny Hancock says move to mandate clearing of G-4 currencies still allows market participant flexibility; stresses importance of international co-ordination
Bank of Russia overhauls organisation as it prepares for expanded remit
Responsibility for financial regulation will shift from a government body to the central bank in September; the bank has also created new departments of monetary policy and statistics
RBNZ plumps for ‘speed limit’ on lending restrictions
Reserve Bank of New Zealand says any restrictions on banks' high loan-to-value mortgage lending will take the form of a quota over time, as opposed to an outright ban
Meeting Basel III requirements ‘the critical question' for India's public banks
'Fiscally squeezed' Indian government may struggle to meet the enhanced capital needs of public sector banks under Basel III, warns Duvvuri Subbarao
Fall in equities most significant global impact of euro crisis, says ECB paper
Working paper measures impact of euro debt crisis on global financial markets; says the transmission ‘hinges more on trade than on finance’
CPSS, Iosco and FSB publish reports on FMIs
CPSS and Iosco says member states are making ‘substantial progress’ towards establishing their principles for financial market infrastructures; FSB offers new guidance for resolution
Competition makes mutuals safer, commercial banks riskier
Bank of Korea research paper shows higher concentration in a less competitive loan market has increased default risks of mutual savings banks since the recent crisis
Europe could learn from Germany’s macro-prudential approach
Germany’s approach to macro-prudential oversight could offer insights into how to democratise ‘hard’ policy tools and enshrine independence at a time when more power is being transferred to the ECB
Central Bank of Peru’s Julio Velarde on the impact of Fed tapering
Peru is more insulated against shocks to its financial system than in the past but managing uncertainty has never been tougher, Central Bank of Peru governor Julio Velarde, tells Christopher Jeffery
The PBoC, the liquidity squeeze and market liberalisation
The PBoC was accused of poor communication and inaction when interbank rates spiked in June. But Hui Feng believes the central bank wanted to give regulated financial institutions a warning
A status report on Dodd-Frank and the Volcker rule
As the US and Europe move closer to co-operating on derivatives legislation, Vembar Ranganathan looks at the status of Dodd-Frank implementation aimed at curbing excesses in the derivatives market
HKMA primed for mobile payments surge
The Hong Kong Monetary Authority is enhancing the legal and supervisory framework needed for the safe development of retail payments for its echnology-savvy population
New central bank policy mandates could cause vicious feedback loops
The trend for central banks to take on mandates for prudential policy in addition to monetary policy could cause dangerous feedback loops in the absence of a well-defined risk appetite
International banks pose risk to global financial system, NY Fed paper finds
Evidence from 2007 suggests banks can more easily deal with a credit crunch in their home jurisdiction than they can overseas, which could be a weak point in the global system, paper finds
‘Striking similarities' between eurozone and the pre-1914 gold standard
Both monetary arrangements provide underdeveloped peripheral countries with easy access to capital from the core countries, triggering asset price booms via the banking system in peripheral countries
RBI policy document pushes CCIL closer to QCCP status
Indian central bank takes explicit responsibility for supervising the Mumbai-based clearing house
German experience offers macro-prudential lessons for Europe, says Buba's Dombret
Germany's approach to macro-prudential oversight could offer insights into how to democratise ‘hard' policy tools and define the role of national central banks, says the Bundesbank's Andreas Dombret
Zimbabwe governor says return of local currency is not on the cards
Gideon Gono issues post-election statement on country's multi-currency regime; tells banks and investors to stop panicking and get on with their boardroom strategies