Central Banks
IMF changes method for calculating SDR currency amounts
IMF will switch to new SDR basket in October, including renminbi for the first time; calculation will use new rounding methodology aimed at minimising deviation from weightings
Nepal to introduce interest corridor in August
There will be an initial large ‘wedge’ between rates when first introduced, official says; policy rate and floor of corridors set in relation to interbank average
Njoroge cites need to anchor expectations as Central Bank of Kenya holds
Monetary policy committee keeps policy rate at 10.5%; increase in fuel tax expected to put temporary pressure on prices, but not to push inflation outside target range
Exposure to sovereign risk may limit banks’ ability to attract deposits – IMF paper
Research shows non-linear relationship between exposure to sovereign risk and deposit outflows; exposure negatively affected growth of consumer deposits 2006-2011
EBA lays out policy options to deal with NPLs
The European Banking Authority issues report on non-performing loans, calling for consideration of ‘bad banks’ and formations of databases on collateral assets such as real estate
Ratings agency fined €1.38 million by Esma for regulatory breaches
The European Securities and Markets Authority fines Fitch for improper discussions of information and mishandling timing of Slovenia’s sovereign downgrade
331,000 counterfeit notes withdrawn in H1 2016 – ECB
Figures show 80% of all the counterfeits were €20 and €50 notes; number of total counterfeits withdrawn in first half of 2016 lower year on year
Do not let resilience foster complacency, Carney tells G20
In his capacity as FSB chair Mark Carney acknowledges financial system resilience in the face of stress, but emphasises need to finish implementing post-crisis reforms
Menon pledges tougher measures on AML controls in Singapore
Ravi Menon says central bank will conduct more intrusive probes of higher-risk institutions and take stronger actions where practices fall short; monetary policy likely on hold for 2016
Italian paper looks at effects of Basel leverage ratio on repo and refinancing
A move to higher leverage ratios by eurozone banks has not decreased their repo and refinancing activities, a Bank of Italy paper says
Irish central bank announces new protections for mortgage borrowers
Variable-rate housing loan borrowers must be informed of cheaper alternative mortgages and have rate rises explained to them by lenders
Turkish central bank to meet with investors under new comms practices
Central Bank of the Republic of Turkey announces string of new communication practices that will see it meet with wider range of stakeholders
EBA publishes final draft of IRB assessment methodology
The EBA publishes the final draft standards by which European regulators will assess banks’ compliance with the rules on using internal models to judge capital adequacy
Inflation expectations are part of QE transmission mechanism – BoE paper
Firms’ inflation expectations increase in response to QE, research finds; interventions played ‘modest’ role in stabilising inflation expectations in recent years
ECB paper compares ability of indicators to predict bond risk premia
Researchers assemble 132 macroeconomic indicators and compare their performance against financial measures as predictors of eurozone countries’ bond risk premia
BoE prize-winning research favours CCB over leaning against the wind
Authors from Lancaster University find credit spread-augmented Taylor rule damages welfare, while a recent BIS paper takes a different analytical approach
Draghi raises possibility of ‘public backstop’ for NPLs
Eurozone recovery is continuing with credit conditions and volumes increasing because of quantitative easing, Draghi says; backstop would be “very useful”, but require Commission support
South Korean governor calls for international swap line expansion
Lee Juyeol welcomes improvements in financial safety nets at both global and regional levels, but suggests more co-operation is needed to ensure they expand further
Atlanta Fed paper demonstrates signalling mechanism in mortgage market
Lenders in mortgage market able to reveal quality of loans by delaying trade, authors find; loans sold five months after origination less likely to default
Sarb hiking cycle is paused, not stopped, governor stresses
South African Reserve bank delays further tightening in wake of more favourable inflation outlook; governor insists it is a ‘pause’ and should expectations change the MPC would act appropriately
MasterCard strikes deal to acquire UK’s VocaLink
Agreement to gain controlling stake in retail payments firm will end ownership by major UK banks; regulator to discuss developments
Mongolia governor replaced two years before end of term
Bayartsaikhan Nadmid, chairman of the supervisory board of the National Agricultural Co-operative Federation, takes over leadership; departing governor had two years left to serve
Indian reserves climb to $360.2bn at end-March
Reserve Bank of India’s latest report on reserve management shows 2.8% increase over six months; two-thirds of foreign currency assets invested in securities