Financial Stability
South Africa moves toward UK-style ‘twin peaks’ regulators
Sarb issues consultative document on introduction of prudential and conduct regulators similar to plans in the UK; IMF study encounters problems in testing efficacy of macro-prudential policy
UK to ‘electrify' bank ring-fence in bid to end ‘too big to fail'
UK chancellor launches legislation to enforce ring-fencing – and separate banks that fail to comply
ECB paper tweaks the evaluation of early warning systems
Research proposes changes in the way the costs and benefits of early warning systems are calculated
NY Fed president calls for tri-party and money fund reform
William Dudley lays out a range of options to ‘make the basic structure of the wholesale funding market as sound as possible'
Rating agency warns of knock-on effect of Fed’s foreign bank rules
Fitch says tighter rules for foreign banks operating in the US are likely to make other countries raise standards as well, putting a squeeze on the growth of global banks
Barnier still examining ‘where to draw the line' on bank ring-fencing
Commission spokesman admits tension between maintaining competitive banks that can still finance economic growth and eliminating risks remaining in the European banking system
Malawi at risk in wake of currency devaluation
Financial stability report reveals inflation doubled after Malawian government floated exchange rate and devalued currency by 50%
Riksbank at odds with proposals to limit capital, analysts say
Proposals released that would halve the size of the Riksbank’s balance sheet; analysts say they clash with central bank policy and are unlikely to be adopted
Efta court's Icesave ruling leaves European deposit insurance in tatters
Efta court move to dismiss deposit insurance claims on Iceland is a ‘Pyrrhic victory’ that throws the participation of small countries in the single banking market into doubt, argues Tim Young
Basel report proposes curbs on bank modelling choices
Basel Committee report finds ‘considerable variation’ in risk-weighted assets for bank trading books; says policy-makers should consider limiting modelling options and improving disclosure
Canadian study links financial development and income volatility
Working paper finds financial development can dampen the impact of technological shocks on the economy
New paper finds Colombia could be in the midst of a housing bubble
'New-fangled method' of detecting bubbles finds Colombian housing could be in a bubble right now, though findings may not be robust
Jwala Rambarran laments Caribbean futility over public debt
The Trinidad and Tobago governor says the fiscal adjustments needed in Caribbean countries are not practicable; questions success of present international initiatives
RBA paper investigates post-crisis leap in currency demand
Despite government deposit guarantee, demand for Australian banknotes increased by 12% following Lehman Brothers collapse
UK parliamentary commission attacks regulators’ ability to hold bankers to account
FSA enforcement head defends authority’s integrity; BoE chief legal adviser confident the central bank’s new supervisory divisions are up to the job
Angola launches new notes and coins, cuts base rate
Notes incorporating new security features to be phased in during the first half of 2013; base rate cut to 10% as inflation hits ‘record low' of 9% per annum
‘Significant work remains’ to fix global finance, says FSB
Meeting of the Financial Stability Board identifies numerous areas that still require work; public comments on policy recommendations reveal concerns over regulatory arbitrage and overlap
IMF paper says central banks are hoarding good collateral
Study finds pools of good collateral are evaporating as a result of unorthodox central bank policies; regulation is amplifying the trend
Bank of Russia warns some banks must enhance capital adequacy
Financial stability review says financial conditions remain ‘quite favourable’, but raises concerns over a downward trend in capital adequacy
Bundesbank paper quantifies ‘considerable’ risk spillovers
Researchers design new methodology for measuring systemic risk and contagion effects, finding spillovers are significant but vary from region to region
Bank of Italy gives green light to €3.9bn MPS bailout
Executive board approves disbursement of bailout funds to Monte dei Paschi di Siena, although the bank insists the situation is ‘completely under control’
UAE bank economist warns LTV caps ‘detrimental to economy'
Chief economist of National Bank of Abu Dhabi warns cap on property loans will depress construction in the UAE
Luxembourg paper says banks’ profitability will not suffer at hands of Basel III
Study says new liquidity coverage and capital-to-asset ratios will have little impact on banks’ return on assets
NZ deputy wary of using risk weights to shackle house prices
Grant Spencer says other macro-prudential tools may be more appropriate to address the build-up of asset bubbles