Macro-prudential
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
BoE studies effects of capital requirements on balance sheets
After the financial crisis, banks placed more emphasis on asset deleveraging and adjusted their capital management practices
Mixed views on Dodd-Frank rollback
No need to dump central clearing and electronic trading mandates, market participants say
Basel III challenging to implement in Islamic countries – Kuwait’s Al-Hashel
Central bank governor says discretion for Islamic systems, “though well-intended”, could create divergence and opportunities for regulatory arbitrage
Denmark’s economy set for a boom, says Rohde
Latest release of reports show Danish economy is resilient and set to grow in the next two years; governor Rohde still concerned about house prices
SAMA governor outlines challenges facing Islamic banking sector
Unified accounting standards would “comfort” regulators and improve transparency for the industry, Alkholifey says; issues need to be addressed in order to foster growth in Islamic banking
BIS paper identifies spillovers from targeted macro-prudential policies
Applying tools narrowly to a sector may nevertheless affect other sections of the financial system, authors find
Ingves: internal modelling may create too much complexity
Basel Committee chair says complexity created by internal modelling has a range of adverse effects, though more research is needed
Should banks hold cocos or other kinds of buffers?
Richard Heckinger examines the merits of contingent convertible bonds vs other instruments for meeting regulatory requirements
French paper presents macro-prudential early warning system
Authors advocate aggregating results of larger number of models
Netherlands paper explores people’s trust in pension funds
Most workers opt for flat-rate annuity arrangements but there are some deviations, authors find; expectations on expenses and trust appear to have an effect
RBS falls short in latest Bank of England stress tests
Three banks show signs of “capital inadequacies” in the latest round of tests, with RBS forced to review its capital plan; Carney says global and domestic risk remains “elevated”, prompting the FPC to leave its buffer unchanged