Banks
New bank business models could undermine stability, panellists warn
Panel including Mark Carney and Agustín Carstens raises concerns over the way regulation and low rates are forcing banks to adapt in unpredictable ways
Mauritius looks to set up asset management company
Central bank launches public consultation on creation of bad bank, which would help ‘clean up clogged balance sheets’ of country’s banks
Lagarde calls for ‘fundamental change’ in Nigerian policy
IMF managing director tells leaders to shore up the banking system, strengthen the external position and exercise ‘restraint’, during visit to Nigeria
Norges Bank paper seeks to improve modelling of money
Researchers aim to capture the role of money as both a medium of exchange and a liquid asset, with the resulting equilibrium underscoring the need for a liquidity coverage ratio
Bank of England paper explores time-varying capital requirements
Authors use firm-bank level database from UK to examine impact of higher capital requirements on asset growth of borrowing firms; also consider interaction with monetary policy
‘Step-in risk’ could become part of Basel framework
Basel Committee consults on the risks created by a bank intervening to support third parties, but reserves judgement on how to incorporate such risks into the Basel framework
National Bank of Austria tells banks not to slow reform pace
Financial stability report notes trend of improving capitalisation has slowed; urges banks to continue the reform process and avoid short-term growth at the expense of stability
Bonus cap may impact other pay regulation, research from Bank of England warns
Researchers see potential for bonus caps to clash with other remuneration regulation; level of pay ‘at risk’ declines
UK payment systems regulator assesses compliance in first annual report
First PSR annual report shows progress is being made towards access and governance goals, but there are still areas for improvement
Bank of Israel challenges interim competition report
Governor Karnit Flug warns of ‘marked risk’ to economic stability from some proposed measures; central bank argues they may hinder competition, not promote it
New Zealand economists stress-test dairy sector
An article published by the Reserve Bank of New Zealand finds banking system losses would still be ‘manageable’ under the worst-case scenario for milk prices and farm values
UK banks must raise extra £27bn to meet resolution needs under BoE proposals
Large banks will have to issue additional subordinated debt to meet MREL requirement under proposals designed to ensure banks will continue to operate under resolution
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
Central Bank of Armenia says currency turbulence has raised credit risks
Financial stability report says economy has been affected by sharp depreciation of the dram, worsening credit risk as many loans are denominated in US dollars
Banks may need major overhaul to handle new disclosures, FSB task force says
Many banks will need to make ‘substantial changes’ to systems and processes to cope with new and more complex standards on accounting for expected credit losses, report finds
Leverage ratio as high as 5% could yield net benefits, BIS economists say
Authors say there is ‘considerable room for manoeuvre’ when it comes to setting a leverage ratio above the current Basel III minimum of 3%
Technology empowering bank customers, says Israeli supervisor
Further integration of tech into banks has increased competition in the market and amount of power customers have over financial institutions, Ber argues
BIS paper looks for nuanced story of 2008 bank failures
Failed commercial banks in the US suffered most from their exposure to non-household real-estate borrowers, rather than traditional mortgages or agency MBS, a BIS economist finds
UK authorities extend Funding for Lending Scheme again
Bank funding scheme will now be tapered over two years, with new banks offered the chance to be involved; lending to SMEs up over the year
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
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
Bank of Israel approves first issue of loss-absorbing bonds
Bank Mizrahi-Tefahot allowed to issue contingent convertible bonds that will count as part of regulatory capital, with other banks expected to follow suit
Speed of response a good proxy for risk culture, FCA director says
Good risk culture makes firms more responsive and can help avoid nasty fines, says UK regulator’s head of enforcement