Capital
BoE economists outline model of liquidity-solvency spirals
Model aims to test banks against the sort of interactions that led to collapse of SVB and Credit Suisse
How to solve the Fed’s $300bn FRTB problem
A sacrifice will have to be made to ensure new market risk rules meet demands for capital neutrality
Financial Stability Benchmarks 2025 report – the threat from tariffs
Benchmarks highlight how many central banks see tariffs as a high risk to financial stability
RBNZ proposes lower capital requirements for lenders
Key proposal would reduce minimum capital requirement to encourage new entrants
Neutral counter-cyclical capital buffer averages less than 1%
But average neutral level of CCyB varies by economic groupings
Uncertainty necessitates strong capital buffers – ECB
Central bank calls for increased attention to macro-pru and monetary policy complementarity
Fed’s new leverage ratio: the horse that never left the gate
Most of the biggest dealers aren’t leverage constrained now, and experts are sceptical that banks will use the extra capacity for Treasuries
Climate risks still on the fringe of monetary policy in Asia
Notwithstanding efforts by the PBoC and BoJ, there is still a need to observe persistent and measurable impacts on inflation and output before climate change truly influences interest rate policy, argues Sayuri Shirai
Warren’s buffer plea is point-scoring, says expert
Professor attacks senator’s call for Fed to tighten bank regs, but echoes concerns about weak lenders
Speedy on-boarding: the push for faster model approvals
Europe’s banking watchdog is planning to streamline how it authorises credit model updates. Not a moment too soon, say bankers
Book notes: How low interest rates change the world, by Jesper Rangvid
This book investigates the possible causes of ultra-low interest rates, the problems low rates cause and the path of future rates
Only 5% of central banks reveal individual bank stress-test results
Respondents share details of how stress scenarios are developed
ECB study points out unevenness in EU capital rules
Current prudential framework generates “unwarranted heterogeneity” in banking union, authors argue
The Bank of England’s four pillars for a new CCP rule book
Executive director urges feedback on margin transparency, broader collateral and aiding innovation
The foundations of sovereign finance are quietly evolving
Digital settlement infrastructure is taking shape. Now SSA issuers must decide how, not whether, to participate, argues Domenico Nardelli
Elizabeth McCaul on supervision, new macro-dynamics and investing in suptech
Former ECB Supervisory Board member speaks about Covid-19 and Credit Suisse shocks, regulation debates, the rise of non-banks and what makes tech projects succeed
Will the UK’s FRTB time warp turn into a horror show?
UK regulator’s proposed transition year in 2027 could double banks’ implementation work
European banks resilient to shocks, EBA says after test
Lenders’ greatest vulnerability is credit risk but they can withstand adverse scenarios, regulator says
Book notes: Inflation, by Mark Blyth and Nicolò Fraccaroli
An accessible explainer about the narratives surrounding inflation – and who it benefits
European Commission already preparing next FRTB move
As EC runs out powers to delay rules again, proposal for temporary capital relief is on the agenda
Bank of England floats ‘quasi-IMA’ in FRTB standardised method
Dealers welcome new route to capitalising residual risk, but it could fragment global ruleset
US Fed urged to curb reliance on its own stress-test models
Original architect of DFAST says supervisors should stop putting all their eggs in one basket
Book notes: Making money work, by Matt Sekerke and Steve H Hanke
This book provides a critique of the post-crisis monetary and financial system, proposing changes that deserve to be broadly read
Consolidation likely among Nigerian lenders – analyst
Small lenders unlikely to meet CBN’s recapitalisation demands, says investment bank’s research head