Financial Stability
BoE paper models risk of financial shock amplification
Working paper develops model of financial system linkages to illustrate shock transmission; finds spread of defaults is amplified by fire sales and curtailed lending
IMF paper finds changing resilience of emerging markets to financial shocks
Working paper assesses net change in ability of emerging markets to absorb financial shocks; says improved economic fundamentals are offset by vulnerabilities due to inflexible exchange rates
UK FSA chairman slams past regulatory mistakes
Adair Turner highlights ‘dangerous institutional underlap’ prior to financial crisis; sets out steps to improve regulation, but says bank management must also change
Tunisian government under fire for sacking central bank governor
Rating agency declares decision to remove Mustapha Kamel Nabli from post ‘credit negative’; loss of well-respected central bank chief threatens institution’s independence, says Moody’s
Vietnam unveils leadership board for new FSAP
State Bank of Vietnam reveals people selected to lead the country’s first Financial Sector Assessment Programme; in-depth analysis will be used by the IMF in surveillance work
RBA’s Stevens confident Australian growth will continue
Reserve Bank of Australia governor discusses factors behind Australian growth outperforming other advanced economies; argues country’s economic position likely to remain strong
Fed governor explains dissenting vote on Volcker Rule implementation
Sarah Raskin justifies her vote against Volcker Rule implementation; argues rule’s provisions unlikely to have significant impact on liquidity
Central Bank of Colombia paper develops early warning model of credit booms
Working paper tests model of credit booms that includes macroeconomic indicators in addition to credit growth; finds the model performs well across a number of Latin American countries
Indonesia enters China interbank bond market
Bank Indonesia and People's Bank of China reach agreement allowing Indonesian central bank access to China's interbank bond market; part of Chinese strategy towards internationalisation of the yuan
Central Bank of UAE enhances security features in banknotes
Fifty dirham note reprinted to include new colour-shifting thread; rest of design to remain the same
Bank of Canada paper warns of shock transmission multipliers
Working paper finds financial integration between countries leads to multiplier effects in the transmission of shocks; suggests greater investment causes greater correlation of output
Central Bank of Iceland chief warns of foreign exchange intervention risks
Már Guðmundsson discusses problems posed by free-floating exchange rates; says central bank actions to lean against capital flows may fragment financial system
BoJ deputy governor highlights benefits of financial co-operation
Kiyohiko Nishimura emphasises positive results of co-ordinated macro-prudential policy action in Asia; says links between Latin America and Asia are also important
Fault found in new Namibian banknotes
Bank of Namibia investigating ‘cracking’ in new banknotes; asks public to handle currency with 'care and pride' and use wallets to limit damage to notes
ADB economist moots idea of common currency in Asia
Principal economist at Asian Development Bank says common currency possible in ‘long run’; panellists outline possibilities for greater Asian economic integration
World Gold Council says disinflation may support gold demand
Statistical commentary argues gold price may increase due to disinflation; says current economic environment ‘supportive’ of gold demand
Central bankers discuss cooperation in times of crisis
Fed’s Duke and ECB’s Cœuré offer thoughts on pros and cons of central banks working together during periods of economic turmoil; both take the chance to defend their institution’s actions
UK Treasury proposes payments regulation overhaul
Government sets out options for changes to payments regulation in UK; favours creation of new ‘Payments Strategy Board’ to monitor industry and make recommendations
Central Bank of Barbados challenges rating downgrade
S&P lowers Barbados’s sovereign credit rating triggering angry response from central bank; says it is ‘manifestly’ not the case that debt risk has increased
BoE reports mixed credit conditions
Bank of England’s quarterly ‘Trends in Lending’ shows lending to UK businesses contracted but consumer credit flows rose over the second quarter of 2012
Spanish governor admits central bank’s failings
Luis Linde addresses past errors made by the Bank of Spain with regard to supervision of the financial system; says hindsight would mean a different approach to counter-cyclical provisioning
Eurozone crisis at 'critical' stage, says IMF
International Monetary Fund stresses need for completion of monetary union and sets out three vital common elements to create banking union; ECB’s Asmussen echoes thoughts on vital need for union
BIS paper argues financial systems can grow too large
Working paper examines impact of size of financial systems on productivity growth; finds size of financial sector initially boosts productivity but beyond certain threshold has negative effect
Bernanke blames Europe and fiscal cliff for stalling recovery
Chairman of the Federal Reserve says two main risks to economic improvement in the US are eurozone woes and looming fiscal cliff; urges lawmakers to act promptly