Financial Stability
Cyprus strikes last minute bail-out deal
Eurosystem agrees to €10 billion bail-out package after Cyprus vows to honour deposit insurance and resolve failing banks; questions remain over capital flight when banks re-open
IMF paper contrasts European countries’ capital accounts
Finds capital accounts rebalanced faster in emerging European countries than in the periphery; attributes difference to faster wage and public sector adjustment
BoE urges banks to use payments systems directly
Bank of England identifies need to clamp down on banks accessing high-value payment systems through other banks as it creates credit and liquidity risks
BoJ researchers find Japanese banks hold too many stocks and too few bonds
Working paper analyses optimal ratio of stocks to bonds for banks to hold; finds most Japanese financial institutions are overweight equities
US banks and regulators both failed on Basel II parallel runs, says Fed official
Failure to exit Basel II parallel runs represents a 'black eye' for US financial sector, says Federal Reserve Bank of Richmond unit head
US agencies clamp down on leveraged lending
Fed, FDIC and OCC issue updated standards for leveraged lenders amid concerns standards are again slipping and many institutions have ‘proven less than satisfactory’ in risk management practices
Depositors will trust EU guarantee despite Cyprus, says Banque de France official
Policy-makers have incentive to accelerate deposit guarantee plans, says Sylvie Matherat of the Banque de France
HKMA report tells investors to brace for volatile financial cycle
Financial stability report says risks from property market volatility have continued to mount; central bank says macro-prudential policy is doing its job but there could be a sudden price reversal
Kazakh banks should go beyond Basel III, says central bank
Financial stability report calls for banks to boost capital levels above Basel III requirements; encourages largest banks to clean up balance sheets and lend more
RBNZ looks to toughen payments oversight
Reserve Bank of New Zealand deems its oversight powers ‘insufficient’ in internal review; proposes new powers to boost authority over payments industry
Dutch paper analyses changes in unsecured overnight money market
Study examines changes to the ECB’s monetary policy framework in the mid-2000s; finds they reduced volatility in Dutch segment of Target II system
IMF research identifies ‘strong macro-financial linkages’ in eastern Europe
Working paper finds macroeconomic factors closely tied to non-performing loans in central, eastern and southeast Europe; warns of ‘strong feedback effects’ between banks and economy
Sepa migration at risk due to poor preparedness, says ECB
First progress report expresses alarm at some companies planning to migrate very close to deadline; payments could be disrupted if deadline missed, but Benoît Cœuré says ‘there is no plan B’
Basel III insufficient for ‘huge’ Swedish banking system, says Ingves
Sveriges Riksbank governor says Sweden must go ‘over and above’ capital and liquidity standards in Basel III; identifies household debt and bank market-funding as core weaknesses
Dombret warns national banking systems are too-big-to-fail
Bundesbank’s Andreas Dombret says too-big-to-fail problem extends to whole banking systems; says some eurozone systems could have to be downsized
Major part of banking union set for mid-2014, says ECB official
National supervisors made 'gigantic mistakes', says ECB's financial stability head; outlines plans for SSM
RBNZ deputy defends bank resolution policy
Grant Spencer insists the Reserve Bank of New Zealand’s resolution policy differs from the controversial Cyprus proposals; says deposit insurance doesn’t prevent bank failures
Higher Basel III pricing deters Asian banks from issuing new Tier II capital
Banks issued debt before the end-of-2012 deadline for Basel II capital, lessening their refinancing requirements for this year
Central Bank of Cyprus governor tells government to scrap small-depositor levy
Panicos Demetriades says government should apply heavier haircut to depositors above €100,000 threshold and spare those below; predicts run when banks re-open on Thursday
French paper quantifies cost of implicit bank insurance
Research examines the cost of implicit insurance given to systemically important financial institutions by EU countries; assesses costs in terms of increased taxes
BoJ researcher finds need for heterogeneous response to credit flows
Working paper shows global common factors account for a ‘quantitatively important’ portion of cross-border credit, but vary between regions; suggests need for tailored policy responses
RBI paper develops method for estimating counterfeit volumes
Researchers redesign inverse sampling statistical method, aiming to measure extent of counterfeiting in India with ‘credible precision’
T2S chief warns regulatory inaction could damage harmonisation process
Jean-Michel Godeffroy says CSD regulation must be passed this year to avoid harmonisation delays; conference panellists raise concerns over costs, limited participation and financial transaction tax
Largest banks $270bn below Basel III core capital limits
Basel Committee finds banks would have missed CET1 requirement under Basel III by $270 billion in June 2012; IMF’s Lagarde condemns ‘uneven implementation’ of rules