Financial Stability
Spain’s ‘bad bank’ structure revealed
Bank of Spain releases the details of new ‘bad bank’ Asset Management Company; hopes to clear up banks’ balance sheets while producing a 14–15% return on equity for stakeholders
Polish paper says euro would have destabilised economy during crisis
National Bank of Poland research examines how adopting the euro would have changed the impact of the financial crisis; fixed exchange rate would have exposed economy to greater shocks
FSB task force proposes enhancements to risk disclosure
Private-sector task force organised by the Financial Stability Board outlines seven principles designed to improve banks’ risk disclosure, with implementation of some sections to begin immediately
Basel Committee reports slow progress ahead of G-20 meeting
Report submitted to G-20 leaders ahead of summit shows just six of 29 systemically important banks are likely to be subject to Basel III rules when deadline is passed
Bundestag approves Germany’s Financial Stability Act
German lawmakers approve new macro-prudential powers for financial supervisors, with the Deutsche Bundesbank gaining a key monitoring role
IMF paper analyses regional impact of deleveraging
Research published by the IMF considers why Asia’s domestic credit supply suffered less than that of other regions in response to banks deleveraging in 2008
RBNZ’s new governor rejects QE and capital controls
Reserve Bank of New Zealand’s Graeme Wheeler sees no need to introduce a ‘desperate’ measure such as quantitative easing in the country; rules out use of capital controls to limit kiwi dollar appreciation
Structure of banks must change as they grow, says BoE’s Haldane
The Bank of England’s Andrew Haldane discusses ways to address the ‘too-big-to-fail problem’; considers impact on banks’ economies of scale
Macedonian vice-governor assesses impact of European deleveraging
Maja Kadievska Vojnovik says Macedonia has been spared most of the direct effects from deleveraging by European banks largely due to the ‘prudent’ funding structure of local banks
FSB resolution paper due in ‘next few weeks’, says BoE’s Tucker
Lack of national legislation on resolution mechanisms has made the drafting of international standards for resolution regimes tricky. But an FSB consultative paper will be issued in the coming weeks
Customer funding gaps fall at Danish banks
Stress tests performed by the National Bank of Denmark show an increase in the capitalisation of the country’s banks; funding gaps shrink as deposits soar and lending falls
Basel Committee official rebuts criticism over regulatory complexity
Basel Committee secretary-general defends Basel III from critics who argue it is unnecessarily complicated; says additional detail needed to meet the increasing complexity of financial markets
Korea to miss OTC clearing deadline
It is ‘highly unlikely’ Korea will meet the deadline to start clearing OTC derivatives by January 1, 2013, due to legislative delays, according to market participants
Colombian paper proposes measure of systemic importance
Central Bank of Colombia study identifies important characteristics related to size, connectedness and substitutability that determine the systemic importance of financial institutions
Bank safety depends on more than high capital, says RBA’s Ellis
Reserve Bank of Australia’s Luci Ellis says higher capital levels alone do not guarantee a bank is safer than its competitors; depends on business model and risk attitudes
US reform could slash $150bn payments bill, says Fed’s Pianalto
Cleveland Fed president Sandra Pianalto explains the Fed’s vision of how the US payments system will operate in a decade; says UK offers valuable lesson on speed
Bank of Lithuania launches liquidity coverage ratio
Liquidity coverage ratio applied to credit unions in Lithuania well in advance of Basel III deadline; similar rules for banks already in place
Central bankers highlight merits of fixed exchange rate regimes
Bosnian and Barbadian governors discuss the importance of a fixed exchange rate for small and open economies
Finland's Liikanen grilled by UK law-makers on banking separation
The governor of the Bank of Finland gives evidence to UK's Parliamentary Commission on Banking Standards; faces a barrage of questions on the precise nature of separation
ECB’s Constâncio downplays impact of single supervisory mechanism
Vítor Constâncio says banking supervision will not be significantly altered when ECB starts new supervisory role; attempts to allay fears over internal conflicts and role of national supervisors
Industry unmoved by death of minor-currency Libor
The Wheatley Review calls for an end to Libor quoting in five currencies, but the number of trades affected is small, say market participants
ECB working paper examines causality in crises
A study published by the ECB investigates where causality lies between banking, debt and currency crises; also compares the duration of each
ECB paper claims credit rating agencies traded grades for custom
ECB study finds credit rating agencies provided more favourable ratings in return for continued custom; quality allegedly compromised by conflict of interest
BoE’s Haldane outlines transparent future for the central bank
Executive director for financial stability says Bank of England has undergone a transformation of communications and transparency; outlines ‘radical’ shift in central bank’s operations