Financial Stability
Basel II's procyclical costs
By increasing capital requirements during economic downturns, Basel II will offset improvements in monetary policy trade-offs caused by countercyclical variations, research published by the Bank of Finland finds.
Fed auction reveals relative interbank calm
Money market tensions in the United States showed further signs of abating on Tuesday as the Federal Reserve published the results of its latest Term Auction Facility operation.
More banking competition produces mixed results
A u-shaped relationship exists between competition and the risk of bank failure, research published by the Centre for Economic Policy and Research (CEPR) finds.
Europe's single payments area goes live
Eurozone banks and customers received a boost on Monday as the Single Euro Payments Area (SEPA) went live.
France's Noyer backs SocGen despite €5bn fraud
Christian Noyer, the governor of the Banque de France, said on Thursday that he was "not at all worried" about Societe Generale, the second largest French bank, despite it falling victim to the biggest fraud in banking history.
European and US markets fall despite Fed cut
Stocks listed on European and US bourses continued to slide on Wednesday, following the Federal Reserve's emergency 75 basis point cut on Tuesday.
Deputy confident Russia will withstand turmoil
The Russian finance industry will escape largely unscathed from the credit crunch, though lending conditions may get tighter, said Gennady Melikyan, a first deputy chairman at the Central Bank of Russia.
Rock-bond plan could pay off Bank loan
The British Treasury underlined its commitment to finding a private sector bidder for Northern Rock on Monday, publishing details of a strategy that would require no upfront repayment of the £26 billion ($50.6 billion) owed by the beleaguered mortgage…
Banking risks must be considered together
The impact of credit and interest rate risk, the two most important dangers faced by commercial banks, must be measured jointly, research published by the Bank of England finds.
Merrill reports $8.6 billion loss for 2007
Merrill Lynch, an investment bank, on Thursday reported $11.5 billion-worth of subprime-related writedowns for the fourth quarter of 2007, taking its losses for last year to $8.6 billion. The bank recorded losses for the fourth quarter alone of 2007 was …
IMF to review central bank response to turmoil
The International Monetary Fund (IMF) is set to investigate the reaction of leading central banks to the interbank turmoil that hit markets in the wake of the subprime crisis.
Interbank borrowing reduces bank risk
Long-term interbank exposures result in lower risk for the borrowing banks, research published by the Centre for Economic Policy and Research finds.
Fed and BoE auction results show interbank easing
Tensions in money markets showed further signs of abating on Tuesday after the Federal Reserve and the Bank of England revealed the results of their latest open-market operations.
Fund manager knocks Bank's role in Rock saga
Philip Richards, the chief executive of RAB Capital, one of two hedge funds that are the biggest shareholders in Northern Rock, the beleaguered mortgage lender, attacked the Bank of England and its governor, Mervyn King, for its handling of the credit…
Injections were vital: Deutsche Bank's Ackermann
Central banks' liquidity injections were crucial in averting the collapse of financial institutions, said Josef Ackermann, the chairman of Deutsche Bank.
Rock repays Bank debt with JPMorgan sale
Northern Rock, the beleaguered British mortgage lender, is to pay back some of its Bank of England debt through the sale of a mortgage portfolio worth £2.2 billion to JPMorgan, the- American investment bank.
Complex rules pose a threat to stability
Opaque regulations not only deepen financial instability but also raise the likelihood of banking crises, research published by the Bank of Korea finds.
Japanese business prepares for e-money surge
The number of payment devices for processing e-money transactions in Japan is set to almost double by 2010 as the payment method gains popularity with consumers.
Central banks get cheaper cash from companies
Private-sector involvement in the printing of banknotes substantially lowers costs, research published by Colombia's Banco de la Republica finds.
Fed's Rosengren calls for banks to declare losses
Banks must fully disclose their losses to limit the damage of the subprime fallout, says Eric Rosengren, the president of the Boston Fed.
Central banks partly to blame for crunch
The creation of excessive global liquidity by key central banks was one of a number of phenomena that led to the current financial crisis, says Willem Buiter, a former member of the Bank of England's monetary policy committee, now an economics professor…
G10 reassured by impact of joint injections
Central bank governors and finance ministers from the G10 economies were "very satisfied" with the effect of the coordinated action to ease interbank tensions, said Jean-Claude Trichet, the president of the European Central Bank (ECB).
Fed pledges more cash to combat interbank woe
In a bid to further ease money market tensions, the Federal Reserve said on Friday that it will increase the amount of extra funds on offer through its additional open market operations after both of its December auctions were heavily oversubscribed.
Differences are a strength of Fed strategy: Kohn
Recent disparities in speeches by FOMC members on the economic outlook in the United States reflect the pace of change rather than any failure in the Fed's communication strategy, says Donald Kohn, the vice-chairman of the Federal Reserve board.