Financial Stability
Chinese banks may face shadow finance credit crisis, say rating agencies
Strong links between the regulated and unregulated credit sectors in China due to the use of wealth management products and lending to shadow banks pose a systemic threat to Chinese banks
Reckless bankers should face jail, says UK parliamentary report
UK Parliamentary Commission on Banking Standards delivers raft of recommendations on how to cultivate better responsibility among bankers, banks and their regulators
Bank of England’s FPC needs expanding, says UK parliamentary review
Parliamentary Commission on Banking Standards delivers verdict on UK’s new regulatory architecture; recommends appointing additional external member to FPC to shift power away from bank insiders
Survey finds Lithuanians lack opportunities to use payment cards
Survey respondents would like to pay by card at places that currently do not accept them - but paying through mobile phones is still beyond the pale
RBNZ’s prudential supervision head backs simpler regulation
Toby Fiennes expresses ‘sympathy’ for arguments in favour of simpler banking regulation, but cautions that simplicity can bring problems of its own; gives hints as to future of regulation
Robert Pringle’s Viewpoint: Rebalancing the fraught relationship between governments and central banks
The growing politicisation of central banking involves central bankers needing to make difficult judgement calls on the areas that lie outside of their competence
UK Payments Council prepares 'roadmap' for reform
'Payments Roadmap' seeks to boost competition and innovation in UK payments, even as a government consultation leaves the future of the Payments Council in doubt
Central banks laying the seeds for ‘crisis in fiat money’, says UK MP Baker
Chair of UK parliamentary group for economics says a sharp correction in developed world sovereign bond prices could spark a collapse in confidence and challenge the sustainability of fiat money
EBA prepares for impact of single supervisory mechanism
Annual report for 2012 shows the European Banking Authority grew rapidly to meet the demands of a widening stability mandate, which will include working with the eurozone’s SSM
ECB’s Asmussen details 'comprehensive assessment' of European banks
The European Banking Authority will conduct stress tests in second quarter of 2014, after initial ECB asset quality review and balance sheet assessment
BoE’s Tucker sketches ‘richer’ capital accord
Paul Tucker gives a vision of what an ideal capital accord might look like in future including greater use of CoCos and longer-term debt; stresses this would still not remove the need for supervision
National Bank of Austria vice-governor faces bribery charges
Wolfgang Duchatczek and eight others charged with bribery in connection with note-printing deals with Syria and Azerbaijan
National Bank of Belgium urges care in use of credit conditions surveys
Analysis shows eurozone’s Bank Lending Survey and Belgium’s Survey on Credit Conditions contain useful information – but ‘crucially’ depend on model specification
Bank of Canada reins in risk concerns
Review of Canadian financial system finds risks from European sovereign debt crisis and Canadian housing market are retreating; special report says collateral demand is ‘manageable’
FDIC chief economist highlights factors behind community bank failure
Richard Brown says community banks play a ‘crucial role’ in the US financial system; presents research identifying common factors behind those that failed during various financial crises
ECB’s LTROs had ‘favourable effect’ on sovereign yields
Dutch working paper evaluates the impact of the ECB’s unconventional monetary policy; says LTRO had beneficial short-term effect on government borrowing in most distressed eurozone countries
UK banks on cyber threat alert, says BoE’s Haldane
Chief risk officers at UK banks worried about cyber-attacks on financial institutions; Bank of England official says government must take ultimate responsibility to guard against cyber threats
Canadian paper proposes new DSGE model for analysing credit shocks
Working paper proposes new model that accounts for the effects of defaults on both households and banks; finds the probability of a company defaulting rises with its leverage ratio
UK mulls US-style bank stress tests
Bank of England seeks to improve bank stress tests by including publicly disclosed remedial actions as debate intensifies over independence and the use of a leverage ratio in the UK
Ingves wants Riksbank monopoly over macro-prudential policy
Stefan Ingves dismisses proposals for central bank and financial services authority to share responsibility for macro-prudential responsibility
Belgian supervisor warns against Basel III over-simplification
National Bank of Belgium’s Rudi Bonte calls for the Basel Committee to take a ‘moderate’ stance on the trade-off between simplicity and complexity in its risk and capital rules
National Bank of Denmark tells smaller banks to strengthen their positions
Financial Stability Report for 2013 reveals that while the five nationally systemic banks have plenty of capital, some smaller banks are found wanting
Austria’s Nowotny cautious on single supervisor
National Bank of Austria governor says there are valid reasons for central banks to play a greater role in banking supervision, but voices concerns regarding the single supervisory mechanism
Ibos warns of payments disruption as Sepa deadline set to be missed
Banking association says 2014 Sepa migration target will be missed at current pace, which could see systems shut down and payments fail; harmonisation may be limited even when target met