Macro-prudential
Macro-pru can offer ‘breathing space’ for Australian housing
Apra’s actions “will not address pressures”, but will provide “breathing space” as they should lessen the amplification of house prices, says RBA’s Lowe
Price disparity in housing market a cause for concern, says RBA’s Lowe
Australian house prices rising ‘briskly’ in some sectors, says governor of the Reserve Bank of Australia
Credit booms make for more severe recessions – BoE paper
Authors find credit growth is a more reliable predictor of the severity of recessions than debt
Denmark is ‘not yet’ in a housing bubble – Rohde
Governor says current housing taxes are “destabilising”, and have had to be countered with macro-prudential policy
Rajan and Weber: central banks may fail next crisis test
Heavyweight economists say central banks may well find themselves intervening at the next major liquidity crisis, despite ostensible progress on resolution
Volcker fights back as prop-trading ban comes under attack
Former Fed chair tells Risk.net that calls for total overhaul of eponymous rule are misplaced
IMF warns bad political choices could trigger instability
Fund says financial stability has improved, but high risks remain in China, Europe and the US
Research finds ways to tame FRTB’s biases in forex charges
New paper shows ways to reduce influence of reporting currency
Riksbank cautious on plans for new macro-prudential tools
Central bank broadly welcomes government proposals but takes issue with elements it sees as limiting flexibility
Kashkari rejects Dimon’s claims on too big to fail
Minneapolis Fed chief rebuts assertion by JP Morgan CEO that US banks are no longer too big to fail; says capital is too low, not too high
Congress urged to curb Fed’s regulatory powers
House hearing revives the debate on consolidating US regulatory agencies
Tarullo admits Volcker rule may be ‘too complicated’
Outgoing Fed governor says Volcker rule probably needs adjustment, though he warns against any measures that would weaken the capital regime
Fed paper searches for optimal bank capital
Study weighs higher cost of equity against the reduction in costly financial crises implied by higher capital, estimating an optimal figure
Debelle sets timeframe for adoption of forex global code
Market participants will have six to 12 months to adjust practices once the code is published on May 25
Tucker: policymakers should focus on resilience and clarity
Central banks would gain legitimacy if they could better explain their models of systemic crises, and if politicians specified a particular risk tolerance, says former BoE deputy governor Paul Tucker
Basel Committee outlines enhanced disclosure framework
Revised Pillar 3 standard adds “dashboard” of banks’ key prudential metrics and consolidates all existing Basel Committee disclosure requirements
Basel Committee to retain provisioning treatment as IFRS 9 launches
Committee admits differences across countries are likely to remain in the interim, while it works to design a new approach to the regulatory treatment of expected credit losses
Fed authors construct ‘financial stability sentiment’ index
Index derives sentiment from central bank financial stability reports, finding a drop in sentiment tends to precede a “significant deterioration” of financial indicators
Bank of England launches first ‘exploratory’ stress test
BoE will assess banks’ longer-term resilience to periods of stagnation; cyclical test made tougher
BoE’s FPC sounds warning on implementation of global standards
FPC cautions on global co-operation around regulatory standards; follows plans for deregulation in the US and tit-for-tat threat from German regulators
Book notes: Competition and Stability in Banking, by Xavier Vives
Xavier Vives has written a fascinating book that highlights many important issues in banking regulation. But there are some flaws in his argument
SEC nominee flip-flops on Dodd-Frank rollback
Rules mandated by statute must be adopted by regulators, Clayton concedes
CEPR report ‘cautiously optimistic’ on bail-in
Thomas Philippon and Aude Salord find range of issues with European bail-in rules, but say they can probably be fixed; Cyprus bail-in “terribly” executed but still worked
Norges Bank paper offers method of stress testing with fire sales
Model recognises possibility of indirect exposures, which could affect outcome of bank stress tests