Central Banks
Jamaica must sustain reform, central bank governor says
Jamaica must keep economic reform efforts going for another 15 years, Brian Wynter says; calls for enhancements to role of IMF’s centre for Caribbean technical assistance
Central Bank of Iceland delays report as tensions over failed banks rise
Central bank postpones launch of financial stability report at last minute, citing the need to wait for new information; governor responds to lobby group calling for heavier tax on failed banks
Expected delay to non-EU central counterparty approval risks frontloading panic
Lawyers predict many CCPs will remain in limbo by the current December 15 deadline, which overlaps with the start of frontloading and ups the pressure on banks ahead of clearing requirement
Emerging markets appear less susceptible to global contagion than advanced economies – BIS paper
Working paper explores whether central banks can still manage domestic financial conditions despite globalisation; isolates ‘contagion’ component in bond yield dynamics
Bundesbank paper explores why banks may lend too much
A limited number of banks may engage in excessive lending, and those that do are more likely to rely upon capital support, says Bundesbank paper
DNB director targets better measurement of inclusion
Frank Elderson emphasises the benefits of financial inclusion and says central bank will put forward proposals for financial inclusion index later this week
Failed normalisation could hold back growth, IMF warns
Flagship report presents different scenarios based on whether the normalisation of monetary and financial conditions progresses smoothly or not; process could stall if risks crystallise
IMF sees divergent risks in new outlook
IMF revises growth outlook for this year and next, while noting transformation in risks; Maurice Obstfeld discussed emerging market policy in anticipation of Fed hike
ECB publishes principles to avoid market-moving missteps
‘Guiding principles’ for communications by executive board members seek to prevent select groups gaining a commercial advantage from appearances
Increases in securitisation may lead to under-pricing of risk, study argues
Increased asset securitisation reduces premia on bonds and equities, Bank of Spain working paper says; decrease in cost of risk may not be related to an actual fall in risk
Three eurozone central banks to trial reverse auctions of securities
The central banks of France, the Netherlands and Lithuania will hold reverse auctions of securities under the public sector purchase programme; trial will run for one month
CPMI launches plan to halt correspondent banking decline
Consultation begins on measures designed to resist the decline of correspondent banking, which is threatening to fragment international payments and damage financial inclusion
Economists push IMF reforms back into spotlight
Indian economists make case for ‘more radical’ review of resource and representation in the future; Nordic and Baltic countries press for ‘interim steps’ towards delayed 2010 reforms
RBI deputy urges banks to address asset quality challenges
SS Mundra discusses challenges facing India’s otherwise ‘vibrant’ banking system; asset quality poses challenges to banks and supervisors
Multi-polar system ‘likely’, says ECB executive
Benoît Cœuré considers evolution of global financial system; sees rise of emerging economies leading to greater multi-polarity
Value of capital controls still up for debate
Research published by BIS and IMF points to potential benefits from capital flow measures and macro-prudential tools, but other economists question the results
Spanish ‘bad bank’ must revise valuations of half of remaining assets
The Bank of Spain says Sareb, the country’s ‘bad bank’, must publish revised valuations of half of its assets by the end of the year; publishes criteria for company to use
CCPs’ initial margins ‘significantly’ raise cost of repo funding, study argues
Initial margins charged by central clearing counterparties (CCPs) can increase the cost of funds raised in repo markets, a Bank of Italy paper argues
Chicago Fed official slams CFTC, SEC over HFT regulation
'You cannot have 80% of the market being just HFT,' says Rajeev Ranjan, a member of the reserve bank's economic research department