Regulation
Rising Swedish bank wages do not reflect rising talent, Riksbank paper finds
Researchers exploit large database of worker skills to assess why Swedish bank wages have risen so sharply in recent years, finding it is not because bankers have become relatively more talented
Peer-monitoring can help identify ‘distressed’ financial institutions, paper says
Colombian working paper presents early warning system which looks at the liquidity price market participants charge one another
Bank of Mauritius governor laments ‘unethical’ behaviour of some external auditors
Rameswurlall Basant Roi says the central bank has noticed moral compasses ‘erratically spinning’ and he warns of the consequences of poor behaviour
Banks should do more to meet Basel disclosures, EBA says
Many banks in the EBA sample are falling short of disclosure rules in the Capital Requirements Regulation, with institutions struggling in particular with reporting their modelling
Central Bank of Kenya to reassess supervision following bank collapses
Central bank begins review of banking supervision following collapse of two domestic banks; new bank licensing on hold until further notice
UK regulators to reopen flawed HBOS investigation
Report critical of financial supervisors who failed to see problems developing or take proper enforcement action, and of bank managers who created a fatally flawed business model
Banks face higher capital requirement under Basel trading book review
Basel Committee impact study on the fundamental review of the trading book implies minimum capital allocated to market risk will rise substantially for some banks
Harnessing network theory for more prudent bank supervision
Closer supervisory activities and data-sharing post-crisis offer the potential to harness network techniques to gain an improved understanding of financial risks
Asia’s Basel III woes
New bank capital rules are bridling Association of Southeast Asian Nations banks with regulations tailored to European and American risk profiles, and may be contributing to a slowdown in growth
Book notes: Banking Reform in Nigeria, by Yomi Makanjuola
A gripping read, starting with Sanusi Lamido Sanusi's leadership of the Central Bank of Nigeria in 2009
FSB unveils final TLAC standard
Global systemically important banks will need to build sizeable stocks of loss-absorbing capacity by 2019; many jurisdictions are lagging behind on implementing resolution framework
European banks ‘lagging behind’ in re-thinking strategies, Bundesbank board member says
European commercial banks have been too slow in adapting to a changed regulatory environment and low interest rates, says Andreas Dombret of the Bundesbank
Regulators push back at complaints of fatigue
EBA chief and secretary-generals of Basel Committee and Iosco defend their work so far and stress the bulk of regulation will be completed in 2016 – though there is more on the horizon
BoE’s Bailey defends dropping reverse burden of proof
PRA chief says decision to backtrack on key element of senior managers regime makes the rules more robust; rejects suggestion he has been ‘cowed by the lawyers’
Research moots greater regulation of US Treasury market
The authors discuss the potential for incentivised or mandated liquidity provision by primary dealers and the introduction of designated market-makers to counter greater instability
Iosco, Asifma officials urge early global co-operation on future rules
Joining forces early on would improve regulatory cohesion between countries, but post-crisis pressure on national rule-makers to legislate poses problems, it is suggested at Hong Kong conference
Hong Kong authorities look to bring shadow banks into resolution regime
Plans for resolution regime are advancing, with legislation expected by the end of the year; unregulated financial institutions can still be covered by the regime
BoE may impose extra liquidity charges, says regulator
BoE will impose Basel III add-ons if banks’ risks are not fully captured by LCR, says prudential policy head
Disharmony threatens EU regulation, says EBA’s Enria
EBA chair says countries have too many opportunities to bend regulations to suit them, undermining supervision and harming banking union; argues EBA should be granted greater responsibilities
EBA raises ‘significant concerns’ over bonus culture at European banks
Bonuses at many banks found to have little correlation with performance in last bonus round before cap; one banker paid over €18 million and largest bonus proportionally was 25 times base salary
US custodians face G-Sib capital hit
Banks warn client funds could be rejected or fees raised to meet new capital demands
EC urged to exempt insurers from central clearing
The need for cash collateral could encourage pro-cyclical investing, industry representatives say
Banks attack proposed risk weights for specialised loans in Europe
EU lenders say both of the EBA’s suggested methods for risk-weighting real estate and other specialised loans would distort regulatory capital
HLA could incentivise systemic activity – Swiss Re
Swiss insurer's head of governmental affairs says crude measures might have unintended consequences for systemic risks