Financial Stability
IMF: financial stress distorts losses in defaults
IMF study says probability of default measures do not fully account for potential losses
‘Bail-in’ rather than bailout, says European markets group
Association for Financial Markets in Europe proposes regulator-enforced version of contingent capital to replace state-funded bailouts; proposals still troublesome, Goodhart says
Interview: Donald Kohn
Blair Baker talked to Donald Kohn on 9 July about his career at the Federal Reserve, monetary policy, the crisis and the future of financial regulation.
SNB posts smaller-than-forecast loss
Swiss National Bank’s first half loss $949m smaller than expected as gold and UBS bailout vehicle put in strong performances; reverses end-2009 purchase of UBS shares to guard against loss
Philly Fed investigates impact of shocks on credit lines
Philadelphia Federal Reserve examines the effect of the subprime crisis on credit lines
De La Rue chief quits over printing errors
De La Rue’s chief executive James Hussey resigns after taking blame for faulty banknotes; shares plunge nearly 10%
Banks can deal with refinancing burden: ECB
European Central Bank gives vote of confidence to lenders, pointing out banks were able to refinance $2.4 trillion in maturing debt between 2007 and June this year
Trenchant critique of inflation targeting
In the fourth of a six-part series on the Japanese economy, Robert Pringle reports from Tokyo on how the crisis has impacted Japan’s global outlook
Lessons from Bill Taylor and the last financial crisis
Kansas City Federal Reserve publishes a short biography of former FDIC chairman
Washington begins writing out reliance on ratings agencies
Federal Reserve, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency and Office of Thrift Supervision begin search for new measure of creditworthiness
King takes firm line on QE, direct lending
Bank of England governor Mervyn King says small businesses’ problems won’t be solved by direct help from the central bank; stresses that banks will be weaned off liquidity support
Serbia’s Marković: effective hedging will ease FX risks
National Bank of Serbia vice-governor Bojan Marković says Serbia must adopt hedging tools to reduce foreign currency exposure
BIS’s Hannoun flags dangers of exceptional measures
Bank for International Settlements’ Hannoun calls on central banks to shrink balance sheets
Mauritania’s central bank releases new note
Central Bank of Mauritania note to be highest denomination in circulation
Freddie Mac reports $6 billion loss in second quarter
Federal Home Loan Mortgage Corporation shows a $6 billion loss as strenuous conditions persist in US housing market; agency asks for extra $1.8 billion in Treasury assistance
Basel III watered down by politics and not fit for purpose, says CLSA risk chief
The most recent draft of the Basel III proposals has been watered down by politics, according to an Asian risk officer
Minimum capital requirements increase systemic risk
Netherlands Bank research notes that Basel II capital requirements foster homogeneity
Fannie Mae posts lowest loss since conservatorship
Fannie Mae reports a $1.2 billion loss, the lowest quarterly loss since its conservatorship
New Zealand mulls lightening banks’ reporting load
Reserve Bank of New Zealand seeks to remove doubling in reporting requirements and bring standards for Kiwi banks in line with international practice; mooted changes expected to reduce compliance cost
BoK’s Kim: Asia was well prepared for market turmoil
Bank of Korea governor Kim Choong-soo says Asian crisis taught region many lessons that helped prepare them in onset of the last crisis
IMF’s Min on Fund’s role in safeguarding systemic risk
Dominique Strauss-Kahn's special adviser Min Zhu highlights excess liquidity, international interest rate differentials and systemic risk as future issues
New Turkish notes spark spike in printing costs
Central Bank of Turkey’s Annual Report shows improved lira notes caused banknote manufacture costs to leap by more than half; governor Durmuş Yılmaz praises inflation targeting framework
Greece passes first hurdle of bailout programme
European-IMF review of Greek economic programme says country is on track to receive second tranche of funds
Ageing to drive down asset prices
Bank for International Settlements research says demographic trends will reduce house prices significantly