Bank for International Settlements (BIS)
People: Peru’s Velarde bags BIS job; Belsham gets second term on BoE committee
People: Peruvian governor succeeds Poloz as Council for the America’s chair; David Belsham gets second term at Prudential Regulation Committee; and more
Low rates push investors to seek risk abroad – BIS paper
Authors find that low rates at home drive risk-taking overseas and the effect accelerates as rates approach zero
BIS paper asks what makes emerging market banks profitable
Both bank-specific and economy-wide factors affect banks’ profitability, authors find
Economists are misinterpreting ‘Triffin dilemma’, says BIS paper
Michael Bordo and Robert McCauley argue there was nothing certain about the collapse of Bretton Woods, but Triffin’s successful prediction led others to mistakenly reapply his theory
2017: The year in review
Over the past year, the global economy regained some strength, and some central banks began to return their policy to normal; but it was not all smooth sailing
BIS issues new ‘streamlined’ stress test principles
Banks have made significant advances in stress testing since financial crisis, Basel Committee says; issues new ‘guidelines’ that focus on stress test evolution
Amended NSFR accommodates extraordinary monetary policy
Basel Committee issues its first technical amendment to the net stable funding ratio, to allow flexibility in the treatment of liquidity-absorbing operations
Monetary regimes drive real rates, BIS paper finds
Claudio Borio et al study data going back to 1870 in search of factors pushing down real rates
Macro-pru tools helped offset taper tantrum – paper
Macro-prudential measures helped reduce the impact on cross-border lending growth, say authors
Early asset purchases much more successful – BIS paper
Authors find effectiveness falls over time as the shock wears off, questioning the value of long-running quantitative easing
Basel III changes set to create big winners and losers
Capital hit for G-Sibs ranges from 28% drop to 43% jump, quantitative impact study reveals
Mario Draghi confirms Basel III is complete
Governors and heads of supervision grant final approval to the amended Basel III framework, but the parties fail to agree on sovereign asset treatment
BIS paper examines how banks use credit default swaps
Banks use CDS for position taking as well as insurance, but there is little evidence of their use to circumvent capital rules
Fed hikes have created ‘paradoxical’ easing – BIS
Review draws parallels between current episode and “Greenspan conundrum” of mid-2000s
Cocos lower banks’ funding costs – BIS paper
Mechanical triggers and equity conversion strengthen cocos’ impact, paper finds
How crypto is my currency?
Richard Heckinger examines how central banks are grappling with new ideas on crypto-currency and distributed ledgers
More work needed on supply channel of finance – BIS paper
Demand-side links between the financial and real sectors are better understood, say authors
Fernando Restoy looks to realign Basel’s FSI
The Financial Stability Institute chair discusses the prospects for implementing Basel III, the challenging political context and the FSI’s role in it all
FCA to publicly recognise selected codes of conduct
Regulator says the public recognition of good practice will encourage adherence
People: Riksbank appoints new head of financial stability
Sweden confirms the head of financial stability; BIS appoints new advisory board; Ukraine has new director of payment systems; and Angola reshuffles board of directors
Race to replace Agustín Carstens enters final stages
With less than a month to go before Bank of Mexico governor Carstens retires, analysts review potential candidates
Productivity puzzles and the neutral rate of interest
Monetary policy frameworks should be subjected to internal and external reviews to ensure they remain fit for purpose
BIS paper studies how weak banks beget zombie firms
Weak banks have a tendency to misallocate capital, authors find, though the effect is only important in the long run, in contrast to earlier studies
OTC derivatives fall to lowest levels since financial crisis, BIS says
The gross market value of outstanding OTC derivatives contracts falls to below $13 trillion at mid-2017