Financial Stability
Ireland’s bad bank forced to slash profit forecast
Ireland’s National Asset Management Agency says €4.8 billion profit estimate was based on exaggerated figures from banks; chairman Frank Daly “disappointed and disturbed” by banks’ distortion
Differing sovereign debt haircuts to be included in EU stress tests: reports
Reports quote German banking officials as saying that extreme scenarios will apply steep haircuts to PIIGS sovereign debt, but none to bunds or French paper
Azerbaijan to move to DSGE model
National Bank of Azerbaijan will switch to consolidated DSGE framework by year-end; deputy research director says model valued for overall coherence and ability to factor in irrational behaviour
National Bank of Slovakia – Monthly Bulletin (May)
Monthly Bulletin shows economic recovery remains on a steady path in Slovakia
Protests at Icelandic central bank on car loan rules
Several hundred demonstrators congregate around central bank in peaceful protest against delinking of car loans from foreign currency exchange rates; rule change could see up to 10% of Icelanders hit with higher repayments
Central Bank of Brazil: inflation tax risked hyperinflation
Brazilian central bank study shows the country risked weak hyperinflation in the past due to high income tax elasticity
BoE data shows May rise in lending levels
Bank of England data on lending shows moderate gains in amount of loans issued to individuals and households; lending still remains below pre-crisis levels
Greek debt crisis sparks widening of almost all global CDS spreads
Cost of protecting against a Greek default up 190% in three months to mid-June as CDS spreads widened for 93% of sovereign debt on back of sovereign debt crisis in Europe
IMF resumes financial aid to Ukraine
Fund approves new application for loans after funding was cut off in dispute over its burgeoning fiscal deficit
ECB handled Greek crisis well: CentralBanking.com readers
CentralBanking.com poll shows more than 40% approval rating for European Central Bank’s handling of the Greek debt crisis
Foreign holdings of US Treasuries rise as supply for agency securities runs dry
Fed data show official-sector holdings of US agency securities fell after 12 straight weeks of gains
Netherlands’ Wellink survives resignation calls
Calls for Netherlands Bank governor to quit followed damning report into the central bank’s handling of failure of DSB
Norges Bank – Annual Report on Payments Systems (2009)
Norges Bank says Norway’s payment system is secure but has room for improvement in cost-effectiveness
IMF: FDI undermined competitiveness in central and eastern Europe
An IMF study on real effective exchange rates reveals large volumes of foreign capital flows reduced competitiveness in central and eastern and European countries
Faith in Fed's omnipotence must be challenged, says Rajan
University of Chicago professor and former IMF chief economist Raghuram Rajan slams view that Federal Reserve can “wave a magic wand” to cure United States’ economic ills
Interview: Sanusi Lamido Sanusi
The governor of the Central Bank of Nigeria discusses banking reform, the Volcker rule, and the role of lenders in society
Eurozone crisis won’t cripple Israel: Fischer
Bank of Israel governor Stanley Fischer says eurozone debt crisis and growth slowdown haven’t changed domestic outlook significantly; cites gains to be made from developing clean technology sector
EXCLUSIVE: Nigeria to cut out universal banking
Nigerian governor Sanusi Lamido Sanusi says new guidelines similar to Volcker rule will prohibit lenders’ engagement in non-banking activities; takeover deals for bailed out banks near completion
Expectations drive house prices
Bank of Spain research finds expectations on both monetary policy and future productivity influence house prices
EXCLUSIVE: Nigeria’s Sanusi explains banking sector bloodletting
Nigerian central bank chief Sanusi Lamido Sanusi explains why he had to “decimate” opposition to his sweeping bank reforms; says Volcker rule poses no conflict with the true task of banks
ECB’s Tumpel-Gugerell: towards a safer financial system
European Central Bank executive board member discusses key elements of new approach to safeguarding stability
Klaus Regling to head euro bailout vehicle
German economist and former director general Klaus Regling to head European Financial Stability Facility set up to bail out troubled eurozone states
Big banks get better borrowing rates: Norges Bank
Research from the Norwegian central bank finds that systemically important lenders get more favourable terms on the interbank markets, partly due to lower perceived credit risk
Determinants of big banks’ credit default risk: IMF paper
Fund research finds factors that determine credit default risk for systemically important institutions are consistent with earlier literature on bank failures; business models, earning potential, economic uncertainty all play a part