Banks
EC approves state aid for two Italian banks
Small regional banks will receive about €5 billion, having avoided resolution
Bank of Israel warns banks are exposed to vehicle finance
Central bank warns exposures are “not negligible” and continue to grow, although they do not yet present a systemic risk
Exogenous constraints affected asset purchase programme, Irish paper says
Research letter looks at impact of extended scheme
FDIC’s Hoenig on restoring the structural integrity of banks
Commercial banks and payment operations should be ring-fenced within bank holding companies as insured entities with 10% equity. Then, market forces – rather than burdensome regulation – could determine capital for other activities
Biggest US banks weather severe stress test
Fed report on stress tests applied to 34 bank holding companies indicates largest institutions would remain well capitalised even in a severe shock
Fed’s Powell looks for ways to reduce ‘unnecessary burden’ of regulation
Fed governor tells senators he sees room in some aspects of post-crisis reforms to ease the burden on banks, though he stresses the need for “vigilance” against new risks
OCC warns on cyber risks from subpar patches at US banks
Regulator says banks have good track record overall, but exams reveal weaknesses
Indonesian banks will switch to reserves averaging in July
Latest move in Bank Indonesia’s major overhaul of monetary policy transmission and efforts to deepen financial markets
Indonesian deputy Perry on revolutionising monetary and financial policy
Perry Warjiyo explains the central bank’s radical overhaul of monetary policy operations, market deepening and financial inclusion in Indonesia
UK ring-fencing an ongoing process, says PRA official
James Proudman says Bank of England is considering changes to its supervisory approach once bank ring-fences are in place; “electrification” powers will be enforced
Irish central bank renews Brexit warnings
Rapid house price rise fuelled by scarcity, Central Bank of Ireland says
Governance frameworks need to fill in for legislative gaps, says Trinidad’s Hilaire
Governor of Caribbean central bank says financial entities have to be willing to “police themselves” by encouraging a culture founded upon strong corporate governance
National Bank of Denmark warns banks on stress test results
Some systemic banks came close to breaching threshold requirements in latest round of stress tests, central bank says
Wheeler hits out at commercial bank for unforgiving commentary
RBNZ governor says commentary threatens its integrity, damaging the central bank and financial markets; former RBNZ official says Wheeler overreacting
The ECB must reform Target2 to make it sustainable
Target2 has emerged as the eurozone’s financing entity for ballooning structural balance-of-payments gaps. The present system is unsustainable and needs reform, says Philip Turner
ECB approves resolution of Spanish bank
Santander set to raise €7 billion to cover capital shortfall at Banco Popular Español
Australia’s bank levy could squeeze TLAC drive
Issuing Tier 2 and senior unsecured debt will become more expensive for the top four banks in the country
More regulation ‘may not fix problematic conduct’, says Sarb’s Mminele
Deputy governor appeals to the entire financial market to challenge and realign current culture; “fundamental shift” needed in order to rebuild “trust deficit”
Balance sheet weakness and falling investment to blame for productivity slowdown – paper
IMF paper rejects structural hypothesis for slowdown in productivity growth following crisis; firms with balance sheet issues and those hit harder by credit tightening cut back on investment
Financial integration will strengthen region – Thai governor
Santiprabhob says policies need to “converge” in order to create an integrated market; payment systems would be a good place to start with harmonised standards a proven solution, he says
Sarb calls for comment on framework for deposit insurance scheme
Facility will provide cover of up to 100,000 rand in the event of a bank failure, with emergency liquidity from Sarb if necessary
Book notes: Crash Bang Wallop, by Iain Martin
A comprehensive study of the City of London and how it became the world’s leading financial centre prior to the financial crisis and the UK’s vote to leave the European Union
ECB paper classifies eurozone banks’ business models
Researchers use supervisory data to outline models’ risk and performance
Israeli survey highlights benefits from ‘digital revolution’
“Tremendous changes” in the banking system are likely to benefit households and small businesses, the central bank says, while stability is also improving