Banks
Zimbabwe central bank calls for flexibility on SME credit
Number of areas still at risk from financial exclusion; only 14% of MSME owners were banked, and only 1% of the adult population used capital market services in 2014
Basel disclosure proposals add ‘dashboard’ of risk metrics
Fresh proposals on Basel III disclosure aim to simplify comparison of banks’ prudential positions; banks will also have to disclose “benchmark” risk weights based on standardised approach
BoE’s Bailey dismisses ideas for radical banking overhaul
PRA chief stands by the current design of banking regulation, rejecting more radical options involving higher levels of equity as “just not practical”
Central banks running out of room amid turbulence, BIS warns
Confidence in central banks is “faltering” as policies prove impotent, while negative rates erode bank profitability and debt levels weigh on global growth
Broadbent weighs pros and cons of digital currency
Issuing central bank digital currencies could make commercial banks safer but might also ‘impair’ their ability to make loans, BoE deputy says
Book notes: The end of alchemy, by Mervyn King
King’s book on how to fix everything that is wrong with the financial and economic system lays out radical proposals that deserve serious consideration
Mervyn King calls for radical banking reform
Former Bank of England governor wants to curtail banks’ use of maturity transformation, putting the central bank’s lender-of-last-resort role at the heart of his new banking system
Mexico’s stress tests reveal some institutions remain ‘vulnerable’ in extreme scenarios
Stress tests indicate that even in adverse scenarios banking sector remains sound; some banks and investment funds are vulnerable to extreme scenarios, including interest rate adjustments
Lenders should reward low-risk customers – Kenyan governor
Banks should praise those performing well regarding credit management, and offer low-risk customers better terms as a result, governor says
Kenya sees a reduction in use of bank services
Mobile payments preferred, with 47.8% of the population using mobile services on a daily basis; banks now mainly used for salary payments
Book notes: Stabilising capitalism: a greater role for central banks, by Pierluigi Ciocca
Pierluigi Ciocca offers an excellent, brief and crisp account of the main issues facing central banks today
End of sanctions offers chance to fix Iran’s banking sector
Iranian banks struggling with high levels of non-performing loans may see their situation improve, but deep reforms are needed and the political situation remains complex
Book notes: Between debt and the devil, by Adair Turner
Adair Turner offers a lively and well-structured account of his proposals to radically overhaul the financial sector
EBA publishes guidelines for co-operation agreements between deposit guarantee schemes
European Banking Authority lays out guidelines for agreements between EU deposit guarantee schemes; clear principles should lessen conflict and make mediation easier, authority says
BoE’s Furse sees benefits to UK as a global finance hub
External FPC member sees plenty of reasons why policy-makers in the UK should seek to make the economy attractive to global financial firms; says robust institutions are important
BIS paper models self-generating financial crises
Authors set out DSGE model where financial crises can be triggered either by an external shock or the endogenous generation of credit booms and busts
BoE and Vickers clash on capital rules
Both central bank and ring-fencing committee chair claim to have recommended higher capital requirements than the other – but a look at the proposals suggests the differences are slim
Austria should ‘stand ready’ to tighten capital requirements, IMF staff say
The country has made ‘significant progress’ in restructuring the regulatory and supervisory framework, the report says, but the banking sector's resilience could be strengthened
BoE sketches proposals for sharia-compliant facilities
Options for deposit facilities include wakalah or commodity murabahah, with the possibility of liquidity insurance to follow
Rajan tells banks to prepare for ‘deep surgery’
RBI governor says banks will have until March 2017 to clean up their balance sheets; banking sector represents weak spot of otherwise vibrant economy
No room for mediocrity, Kenya governor warns banks
Patrick Njoroge tells bankers there is ‘only the thinnest of margins’ for error; each customer should be treated as if they were ‘the only customer in the world’
Danish economists test measure of systemic risk
National Bank of Denmark paper uses ‘SRISK’ measure to assess systemic risk in the Danish financial sector, finding it was a good predictor of banks that needed bailing out
RBI report lays ground for trading new derivatives
Working group proposes allowing new interest rate options in India to improve financial institutions' ability to hedge interest rate risk
RBI’s Gandhi: are regulators ‘barking up the right trees’?
Deputy governor stresses effective regulation is not about ever more detailed rules but rather taking a broad view and spotting emerging risks early on