Macro-prudential
Basel Committee warns on potential missed deadlines
A “significant number” of Basel standards still need to be translated into domestic regulation as deadlines loom; problems with risk-weighted asset variability and inconsistency continue
Property prices closing in on pre-crisis levels – BIS statistics
Statistics for the first quarter show advanced economy prices approaching levels last seen before the financial crisis, but emerging markets see a dip; research links house prices to credit conditions
Frontier markets need framework to strengthen capital flow resilience – IMF paper
Frontier markets are affected by capital flows in similar ways to emerging markets, the paper argues, suggesting a change in the “landscape” of capital flows could have policy implications
IMF working paper encourages Italian banks to clean up balance sheets
Italian banks are likely to become more profitable as economy recovers, authors say, though their capacity to lend is linked to capital buffers
CPMI-Iosco issues report on key data for future derivatives reporting
Report sets out working group’s proposals for how OTC derivatives products should be reported to trade repositories using unique identifiers
Definitions matter when using DTI ratios – Riksbank paper
How regulators define debt and income can affect the outcome of financial stability analysis and the use of macro-prudential tools, authors say
Data gaps hamper work on emerging market vulnerabilities – BIS paper
Large debt stocks, particularly in foreign currencies, point to vulnerabilities in some emerging markets, but gaps in the data are hampering analysis, BIS economists say
FSB fleshes out guidance on resolution
Reports add detail on emergency funding needs for global banks and maintaining the continuity of critical services during resolution; most standard-setting work expected to be finished in 2017
RBI should improve link between analysis and macro-prudential policy – FSB review
The Reserve Bank of India should consider regular financial stability meetings to set policy, and it needs to support its decisions with deeper analysis, a peer review finds
Korea needs right kind of banking competition – quarterly bulletin
Competition can harm welfare if it is focused on gaining market share through a price war, authors say; Korean system may benefit from greater diversity
Irish central bank forms macroprudential committee
Governor Philip Lane announced internal advisory committee on design of macroprudential policy; featuring senior officials, the group will convene for the first time in “early September”
ESRB unveils methodology for mapping shadow banks
ESRB presents report on European shadow banking and identifies major risks in sector; says major gaps in data still exist
UK MPs urge separation of Financial Conduct Authority functions
Parliamentary committee suggests enforcement is separated from the FCA in a report on HBOS failure; the authority says this would inhibit its ability to act as a regulator
Irish central bankers take first look at effectiveness of macroprudential housing policies
Ireland’s central bank publishes examination of its first full year of operating macroprudential measures affecting the housing market; compares data on borrowers subject and free from limits
Beyond banking: ESRB wants wider macro-prudential toolkit
European Systemic Risk Board argues for providing policy-makers with macro-prudential instruments extending to all forms of credit; lays out specific short- and long-term actions
Tighter mortgage lending rules proposed in New Zealand
Central bank looks to crack down on investor lending with high loan-to-value ratios, while tightening the rules for most loans to owner-occupiers; new tools also on the table
Turkish central bank steps in to calm markets in wake of coup attempt
Central bank promises banks unlimited liquidity as failed coup sends shockwaves through markets; economists say banking sector is holding up so far but has some vulnerabilities
MAS’s Menon urges careful calibration of Basel III
Managing director warns against raising capital requirements further for fear of damaging growth; says final calibration must keep SME and trade finance in mind
ECB paper explores capital-based macroprudential measures
Dampened credit and asset price growth can have a “sizable” impact on predicted crisis probabilities, authors note; they present an early warning global autoregressive model
NPLs down overall but progress is uneven – Kuwaiti report
Kuwaiti banks’ non-performing loans fell in aggregate in 2015 though they are on the rise in the household sector; banks well capitalised but asset growth slowing, financial stability report finds
Banks coping with tougher environment – Omani stress tests
Central bank’s latest financial stability report says banks are well placed to weather shocks, as it builds regulatory capabilities and early warning indicators
Basel Committee scales back risk weights in revised securitisation standard
Tighter definition of what counts as a “simple, transparent and comparable” securitisation gives room to allow “modest” reduction in capital requirements, committee says
Sarb faces tough job amid ‘sobering’ outlook, IMF warns
Capital flows, sovereign rating and financial sector health form dangerous links, fund says, though South African authorities stress they have made preparations
RBNZ weighs tighter macroprudential policy and wider toolkit
Reserve Bank of New Zealand considers use of debt-to-income ratios to calm housing market, consultation with banks to occur before implementation