Central Banks
Markov switching model enables diagnosis of ‘systemic financial stress episodes’, ECB paper argues
A Markov switching model can be used to diagnose episodes when both the real and the financial economies are subject to simultaneous severe stress, paper finds
Chilean central bank spells out risks to outlook
Central bank expects inflation to return to 3% target by end of 2017 according to latest forecasts; details risks from home and abroad to macroeconomic outlook
Bank of England tackles challenges flagged by staff survey
While the results show a strong, positive corporate culture at the BoE, the central bank has identified four areas for improvement
Turkey holds policy rates steady despite rising inflation
Turkey’s monetary policy committee voted to keep interest rates steady despite inflation continuing to rise further above its target level
Irish regulations aim to extend protection to SMEs
Regulations published by the Central Bank of Ireland aim to increase the transparency and protection offered to small and medium enterprises borrowing from banks
RBI is rebalancing shadow-banking regulation, Gandhi says
The central bank seeks to tighten regulation and move from entity- to activity-based rules, the deputy governor says
Russian and Chinese central banks sign MoU
The governors of the Russian and Chinese central banks sign memorandum of understanding; will now be able to issue bonds in each other’s markets
Malawi stress test shows three banks fall below Tier 1 requirement under minor credit shock
Latest stress tests show improved resilience but credit shocks remain greatest risk, Malawi’s latest financial stability report reveals
People: NBIM names real estate CEO; Gerlach moves to private sector
Norges Bank Real Estate Management gets CEO; Stefan Gerlach takes up new role at Swiss private bank BSI; and more
Paper warns macro-prudential tools can have ‘blunt’ impact
Working paper sees potential for macro-prudential tools to have ‘aggregate’ impact, using ‘quantitative restriction’ deployed in Japan from 1970s onwards as an example
IMF reforms approved by US Congress
Christine Lagarde and the People’s Bank of China welcome the approval of the US Senate for quota and governance reforms at the IMF, agreed by the board in 2010
‘Step-in risk’ could become part of Basel framework
Basel Committee consults on the risks created by a bank intervening to support third parties, but reserves judgement on how to incorporate such risks into the Basel framework
NSFR should be introduced for all EU credit institutions, EBA says
A net stable funding ratio must be introduced for all EU credit institutions, broadly in line with Basel model, the EBA says; data suggests most EU banks are already compliant
National Bank of Austria tells banks not to slow reform pace
Financial stability report notes trend of improving capitalisation has slowed; urges banks to continue the reform process and avoid short-term growth at the expense of stability
Rohde says resolution offers ‘genuine alternative’ to granting emergency liquidity
With the ability to recover or resolve firms in an orderly fashion, the National Bank of Denmark finds itself with an alternative to granting emergency liquidity assistance, governor says
BoE’s FPC in line for powers over buy-to-let market
Government proposes handing central bank powers of direction over LTV and ICR limits for buy-to-let mortgages, over a year after the BoE first requested them
Turkish inflation to drift toward target over next two years, report says
Turkey’s inflation rate will remain above the 5% target for much of the coming year, the latest quarterly report from the central bank says
Kuwait joins hikers club in wake of Fed rate rise
Kuwait look to strengthen currency after Fed rate rise; UAE and Saudi Arabia, which operate with dollar pegs, also move
External review recommends Bank of Finland expand its research unit
The Bank of Finland should increase the size of its research unit and revise its rankings of research journals, an external evaluation says
LatAm response to Fed sees two hikes
Mexico and Chile both raise rates by 25bp in the wake of the Fed decision, with currencies remaining relatively stable in the aftermath
Bank of Japan tweaks QQE with maturity extension and new ETF purchases
BoJ will continue to buy 80 trillion yen worth of JGBs a year, but with slightly longer to run to maturity; announces new ETF programme to offset sales of old stocks
Peso down almost 30% as Argentina lifts capital controls
Capital controls lifted allowing greater access to foreign exchange; peso slides by 29% against the US dollar as markets open
Colombian paper explores signals from FX interventions
Interventions in the foreign exchange market act as ‘signals’ to solve co-ordination failure, paper says, suggesting findings can help strategy
EBA guidelines limit European banks’ exposure to shadow banks
The European Banking Authority has published guidelines limiting the exposure of European Union financial institutions both to the shadow banking sector and to individual firms within it