Banks
Research finds ways to tame FRTB’s biases in forex charges
New paper shows ways to reduce influence of reporting currency
‘Urgent’ action needed to boost bank profits – BoJ report
Financial system report notes bank profit margins have been squeezed, but says sufficient capital is supporting lending for the time being
Riksbank cautious on plans for new macro-prudential tools
Central bank broadly welcomes government proposals but takes issue with elements it sees as limiting flexibility
Swift rolls out new cyber defences for central banks
System uses machine learning to spot patterns and anomalies, so central banks and other institutions can act early on suspicious transactions
Lebanese banking sector holding up, despite Syria crisis – central bank
The banking sector remains liquid and well capitalised despite a “strained” Lebanese economy, the central bank says; new compliance unit formed
Financial integration enables EMs to improve trade integration – paper
BoE paper sheds light on relationship between foreign direct investment and international trade, highlighting the “substantial” economic effects for emerging markets
Kashkari rejects Dimon’s claims on too big to fail
Minneapolis Fed chief rebuts assertion by JP Morgan CEO that US banks are no longer too big to fail; says capital is too low, not too high
Congress urged to curb Fed’s regulatory powers
House hearing revives the debate on consolidating US regulatory agencies
Esma calls for greater powers over national supervisors
Supervisor also wants the authority to pause the application of some rules
Brexit will be ‘litmus test’ for global system – Carney
Global financial system has reached “fork in the road”, says Bank of England governor; UK financial firms told to submit robust set of Brexit contingency plans by July
BIS report: build liquidity co‑operation early to prepare for crisis
CGFS report urges central banks to build networks domestically and across borders to have liquidity ready for the next crisis
Tarullo admits Volcker rule may be ‘too complicated’
Outgoing Fed governor says Volcker rule probably needs adjustment, though he warns against any measures that would weaken the capital regime
Fed paper searches for optimal bank capital
Study weighs higher cost of equity against the reduction in costly financial crises implied by higher capital, estimating an optimal figure
BoJ builds on BIS banking statistics
Researchers break down the statistics further, shedding new light on patterns of cross-border banking
Bahamas further relaxes capital controls
Specific sectors of the economy will be able to obtain foreign exchange from banks both at home and abroad; non-resident firms to gain credit from international banks licensed in the Bahamas
Basel Committee outlines enhanced disclosure framework
Revised Pillar 3 standard adds “dashboard” of banks’ key prudential metrics and consolidates all existing Basel Committee disclosure requirements
Basel Committee to retain provisioning treatment as IFRS 9 launches
Committee admits differences across countries are likely to remain in the interim, while it works to design a new approach to the regulatory treatment of expected credit losses
IMF working paper examines the impact of “de-cashing” on monetary policy
IMF working paper examines the impact of “de-cashing” on monetary policy, claiming transmission would become “easier” and “faster”
Bank and capital market financing not created equal – BIS paper
Substituting bank loans for non-bank finance after a shock appears to have a negative impact on the economy, authors find
Bank of England launches first ‘exploratory’ stress test
BoE will assess banks’ longer-term resilience to periods of stagnation; cyclical test made tougher
Kenya’s Imperial Bank given 90-day lifeline
High court extends commercial bank’s receivership to allow shareholders and receiver to reach agreement; Kenya’s central bank takes first step toward removing licensing moratorium
Extended monetary easing in US has larger impact abroad – paper
IMF paper examines the impact of periods of prolonged monetary easing on risk-taking behaviour; leverage ratio and other measures of vulnerability increase
Book notes: Competition and Stability in Banking, by Xavier Vives
Xavier Vives has written a fascinating book that highlights many important issues in banking regulation. But there are some flaws in his argument
CEPR report ‘cautiously optimistic’ on bail-in
Thomas Philippon and Aude Salord find range of issues with European bail-in rules, but say they can probably be fixed; Cyprus bail-in “terribly” executed but still worked