Macro-prudential
Italian governor calls for reform of NPL regulations
Bank of Italy paper sets out proposals for sterilising effects of NPL sales
FSB: ‘no immediate case’ for aligning rehypothecation rules
No pressing need to harmonise rules, but better monitoring of global collateral reuse will give regulators a clearer understanding, FSB says
BoE paper maps contagion via CDS market
Economists identify mechanism whereby declining creditworthiness can spill from one bank to another via credit default swaps
Non-banks may amplify risks from policy divergence, Nakaso warns
Non-banks may be less constrained than banks in supplying dollar funding, but it could dry up at the first sign of trouble; the BoJ starts stress testing foreign currency liquidity
Basel set to decide on capital relief for accounting changes
Phase-in to IFRS 9 and Cecl needed to avert "a dramatic overnight drop in regulatory capital", say auditors
FSB finalises recommended action on asset management risks
Set of recommendations tackle liquidity, leverage, op risk and securities lending; work on globally systemic designations pushed back until 2019
BIS paper flags importance of “multi-layered” bank networks
Authors go beyond aggregate exposures to reveal “multiplex” interbank networks, which could allow more tailored policymaking
Central Bank of Philippines to improve surveillance – Tetangco
Philippines has “ample” policy space to respond to risks, governor says, but monetary policy will only be enacted to prevent inflation deviation
Completing reform agenda may not be enough – Caruana
BIS chief urges continuous effort to finish reforms, but says they need to be backed by policies that raise earning and debt-repayment capacities
Colombian macro-pru measures have been effective, paper shows
Paper analyses the impact of macro-prudential measures on credit supply of banks; both reserve requirement and dynamic provisioning scheme have negative effect on credit growth
Basel III completion date pushed back
Governors and heads of supervision to delay meeting that would have given final approval to Basel III, as disagreement continues on output floors
Chile notes health of domestic economy has declined
Latest financial stability report highlights the lack of profitability in the banking sector; institutions’ ability to cope with adverse external scenarios has “diminished”
FSB: Japan should strengthen financial stability framework
Latest peer review says Japan has work to do in improving the macro-prudential framework and clarifying approach to resolution
BoE paper experiments with measuring vulnerabilities
The study finds the US had highest levels of vulnerability in the run-up to the 2008 financial crisis, with Asia and Europe appearing “robust”; the picture has now reversed, authors say
European agencies see pitfalls in growing big data use
Financial products likely to become more tailored to consumers, but that will not benefit everyone, regulators warn
US and EU outline final rules on loss-absorbency
Fed adopts final rule on loss-absorbency, while EBA makes final recommendations to European Commission; US rules include grandfathering and exceptions for foreign firms
Sharper distinction in household vulnerabilities needed – Poloz
Latest financial stability review stresses importance of understanding difference in risk in housing sector; household indebtedness and housing market imbalances are key concerns
RBI paper unpacks India’s non-performing loan troubles
Authors find bank risk-taking is procyclical and the level of non-performing loans responds to the interest rate environment and the overall growth of the economy
Task force launches climate disclosure recommendations
Mark Carney says better information will allow investors to “back their convictions with their capital”; Mary Schapiro says businesses will take the lead, even if politicians will not
US agencies reject Wells Fargo resolution plan
Bank faces further curbs on its activities if it cannot present the Fed and FDIC with a sufficiently improved plan by early 2017
FCA urges progress on equivalency for derivatives trading
US and EU regulators should base recognition decisions on outcomes, not technical details
ECB backs EC plan to consolidate macro-prudential policy
Central bank says it should be handed new and clearer powers, while toolkit should go “beyond banking”
Eight banks struggle in Czech stress tests
Adverse scenario pushes many banks below regulatory capital minimums, though the system as a whole remains resilient, central bank says
Kganyago warns of ‘importing structural instability’
Sarb governor highlights impact of global banking regulation on South African economy, as Barclays prepares to pull out of the continent