Banks
FSB refines shadow banking definition with new ‘activity-based’ measure
Attempt at greater precision estimates shadow banking sector represents around 30% of non-banks; final framework for securities financing transactions published
BoE paper maps UK bank response to 2008 liquidity shock
Authors contribute to international study of banking networks, finding UK banks that grew faster pre-crisis responded more sharply to the liquidity shock in 2008
UK authority calls on banks to help tackle cyber crime
UK National Crime Agency calls on banks to collaborate with authorities to reduce fraud
FSB unveils final TLAC standard
Global systemically important banks will need to build sizeable stocks of loss-absorbing capacity by 2019; many jurisdictions are lagging behind on implementing resolution framework
Hungarian central bank mulls lower capital requirements for SME-friendly banks
Central bank looks to incentivise lending to small businesses; risk-absorbing swaps and 'preferential' deposit facility could be supplemented by lower requirements
Bank of Israel unveils plans for better credit data gathering
Registry designed to improve both credit provision and financial stability; deputy governor says central bank has learnt from others while tackling what has been a major project
FSB finalises elements of global bank resolution framework
The raft of documents includes final principles for effective cross-border resolution actions; latest list of globally systemic banks also published
BIS statistics show sharp contraction in Q2
Cross-border claims fall significantly in advanced economies, led by euro-denominated transactions; credit to emerging markets is up quarter-on-quarter, but down year-on-year
BoE’s Bailey considers how to foster competition
Bank of England deputy governor highlights the role of the PRA in fostering competition in the banking sector
UK’s Osborne defends ‘middle way’ struck by BoE bill
Finance minister tells MPs the decision to drop the reverse burden of proof avoids creating a two-tier regime; talks up value of BoE independence in response to concerns over NAO role
BoE unveils new systematic stress tests
Stress tests designed to move counter-cyclically with the financial cycle and inform decisions on capital buffers; BoE looking to improve modelling techniques to keep pace
Brainard mulls how to reduce ‘undue’ regulatory burden
Fed’s Lael Brainard discusses potential areas for reducing regulatory burden faced by banks; warns process may take longer where interagency agreement needed
EBA plots shift to new phase of work
As European banking legislation is finalised, the institution plans to concentrate more on harmonisation and less on standard-setting; expanding workload contrasts with shrinking budget
PRA plans to subject ‘other systemic institutions’ to tougher scrutiny
Institutions designated as O-Siis would face tighter scrutiny and be expected to produce resolution plans, with the potential for further measures in the future
BoE unveils final plans for ring-fencing banks
Consultation sets out how bank holding companies should structure themselves to comply with legislation on ring-fencing, but a decision on extra capital buffers is yet to come
Ingves laments complexity in Basel trading book
Basel Committee chair says he would have preferred a simpler approach to market risk; work on other risks will tend towards greater simplicity, and will likely include external credit ratings
Hong Kong authorities look to bring shadow banks into resolution regime
Plans for resolution regime are advancing, with legislation expected by the end of the year; unregulated financial institutions can still be covered by the regime
Denmark’s Rohde concerned by lack of bail-in tool at mortgage banks
European standard for loss-absorbing capital does not apply to Danish mortgage banks, meaning resolution frameworks have to make do without bail-in
Basel Committee considers limiting bank modelling choices
Study of internal models of counterparty credit risk finds ‘considerable’ variation between banks, raising the possibility of the Basel Committee takings steps to increase consistency
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