Banks
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
Global factors harming domestic policy transmission in Asia, IMF research finds
Authors find global factors help to explain why bank funding in Asian economies has such a limited role in transmitting monetary policy
Trichet says banks must keep ‘hammering’ at their culture
Progress towards improving culture and behaviour at banks is uneven, and the G30 is calling on the laggards to catch up; Central Banking asked members what still needs to be done
FSB agrees final TLAC principles but asset management work has way to run
Meeting in London sees the organisation agree final draft principles for total loss-absorbing capacity, as new branches of research into asset management risks sprout
Macro-prudential institutions were designed too hastily, Tucker warns
Group of economists including former BoE deputy warn macro-prudential policies are too poorly understood and were too hastily assembled to be effective, outlining possible enhancements
Fed board approves changes to same-day ACH service
Institutions that receive payments through the ACH network will have to participate in same-day service, but will be compensated by a new interbank fee levied on originators
FSB pushes for better tools to tackle high corporate debt
Report to G20 outlines some tools that could be used to tackle high and rising corporate debt, but the design process is still ongoing
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
Safe as houses: designing a more stable mortgage
A conference at the New York Fed earlier this year looked at some innovative mortgage designs that could boost financial stability. Central Banking approached some of the speakers to learn more
Israel’s bank supervisor looks to split credit card companies from banks
Hedva Ber has revealed plans to boost competition in financial sector, including forcing two of the largest Israeli banks to sell their credit card companies and creating a credit database
UK payments regulator approves of code of conduct
Big UK banks have published a voluntary code of conduct for those providing indirect access to payment systems, in a bid to improve standards
UK payments have room for improvement, report finds
Report identifies priorities for better payments among consumers, businesses and government, finding desire for faster, more flexible payments with less room for error
Kazakh central bank moves to stabilise banking sector
Central bank launches plan to compensate depositors hit by collapse in value of tenge, as banks reliant on external funding run into problems
Rajan warns banks there will be no more ‘extend and pretend’ on NPLs
Banks need to face the fact that large chunks of their assets are non-performing, and the RBI will no longer prop them up via a policy of forbearance, governor says
RBNZ tweaks macro-prudential plans after banks push back
Banks will be subject to more lenient ‘speed limits’ and will have more time to adapt to new macro-prudential rules, after the industry complains
BoE economists mine tweets for early-warning indicator
Central bank put its work on ‘text mining’ and big data to work during Scottish independence referendum in an attempt to create an early-warning indicator for bank runs
China should ‘rein in’ vulnerabilities, IMF warns
Economy faces challenge in balancing reform and growth, with IMF warning of growing risks in the financial system and need for further rebalancing
IMF paper finds standard risk metrics perform poorly with low financial depth
Authors find ‘excess credit’ is a better early warning indicator for financial instability than credit-to-GDP where countries have limited financial depth
UK regulators spare Co-op Bank £120m fine
Bank of England and FCA ‘censure’ the troubled bank for multiple failures including not being open with regulators, but drop a £120 million fine on financial stability grounds
End of sanctions could be double-edged sword for Iranian banks
Iran central bank vice-governor warns domestic banks have work to do before they are opened up to international competition, but Iranian investors see end of sanctions as broadly positive
Lobbying softens regulatory treatment of distressed banks in US, paper finds
Under-capitalised US banks are less likely to be rigorously supervised if they have exercised political or regulatory influence, a working paper published by the ECB finds
ECB paper models joint default risk with fat tails
Researchers reject normal distribution in favour of one with fatter tails, find ‘unprecedented’ tail risks in 2011-12 fell sharply after the OMT announcement
UK payments regulator evaluates efforts to improve access
Banks and payment systems now expected to be more transparent about criteria for access; regulator says this is now bearing fruit, but the real tests are yet to come