Capital
Lobbying softens regulatory treatment of distressed banks in US, paper finds
Under-capitalised US banks are less likely to be rigorously supervised if they have exercised political or regulatory influence, a working paper published by the ECB finds
ECB researchers examine flight to safety during sovereign debt crisis
Working paper tracks geographical distribution of capital flight, finding different movements by intra-eurozone and external investors; movements ceased when OMTs were unveiled
Capital volatility fears spur talk of wider G-Sii charges
Concerns about yo-yoing capital are behind proposals to extend the higher loss absorbency requirement beyond non-traditional business
Competing theories explain drop in China’s reserves
Holdings fall $110 billion in Q1 as domestic investors look abroad and the PBoC defends the exchange rate; some analysts say ECB quantitative easing is probably the real villain
Non-financials may be caught by shadow bank rules
Banks warn of 'massive' impact from European Banking Authority proposals, which would limit credit lines
ESRB open to revising macro-prudential intermediate objectives
European Systemic Risk Board sees scope for ‘sharpening’ some of the existing five objectives, while potentially adding others, in review of EU policy
IMF paper finds foreign investor base crucial for EM sensitivity to shocks
Working paper finds emerging markets that rely more on international funds and global banks are more sensitive to ‘global push factors’ such as US monetary policy
CBRC's Shang Fulin on reforming bank profit models and dealing with non-performing loans
China Banking Regulatory Commission chairman Shang Fulin discusses how China's banks will respond to major financial market reforms while also addressing issues related to non-performing loans
CSRC's Xiao Gang on major reforms to deepen capital markets in China
China Securities Regulatory Commission chairman Xiao Gang speaks about efforts to comprehensively reform the operation of China's capital markets
WEF panel sets out plan to develop African capital markets
Rwanda governor says more domestic savings and deeper markets necessary for development; private sector participants praise integration in East Africa
Basel considers U-turn on fourth trading book QIS
Industry lobbying prompts regulator to revive plans for a further impact study
ECB looks for ‘quick wins’ to put momentum behind CMU
Eurosystem report on capital markets union emphasises need for the project to deliver early victories if it is to gather enough momentum to be a success
RBA’s Lowe wary of structural adjustment in global interest rates
Australian deputy governor expects rates on offer to savers to pick up when confidence grows and businesses compete for funds again, but sees potential for structural shift as well
BIS’s Caruana wants monetary policy to tackle stability and 'spillbacks'
The international monetary and financial system would be a lot safer if central banks set monetary policy with an eye on financial stability and cross-border impacts, BIS general manager says
BIS economists say investor behaviour key to understanding EM challenges
Hyun Song Shin and Philip Turner consider implications of shift in financial intermediation for emerging markets; part of wider Banque de France review on the subject
Glenn Stevens flags capital market risks
RBA governor says the growing role of asset managers and lower market liquidity are cause for concern; combined with cross-border capital flows, this could trigger an abrupt sell-off
Paper examines role of capital in BHC lending decisions
Authors find an increase in capital requirements of bank holding companies is ‘likely’ to increase the interest rate charged on loans, resulting in a ‘significant’ reduction in lending
Yellen sees ‘room for improvement’ on risk management
Fed chair says banks have strengthened their risk management, internal controls and governance, but more can be done and supervisors will be ‘watching closely’
Capital markets union must be carefully focused, say BoE researchers
Paper puts forward framework for analysing the myriad proposals under the umbrella of ‘capital markets union’, and argues they should be more targeted
Buba research links output volatility and capital flows
Discussion paper finds countries with more volatile growth rates face greater procyclicality of capital outflows, which may be a result of precautionary saving
BoE researchers flag potential flaws in CCP default funds
Paper asks whether ‘cover two’ standard for central counterparties is tough enough to prevent ‘disaster’; some distributions of risk give cause for concern
Fears surface over lack of trust among resolution authorities
Countries still do not trust one another enough to cooperate fully during the resolution of a globally systemic bank, participants at Chatham House event warn
EBA zeroes in on recovery and resolution trigger conditions
European Banking Authority publishes final guidelines on testing for bank failure and launches consultation on what conditions could trigger a resolution process
French paper warns buffers ‘may not be sufficient’ to avoid credit crunch
Banque de France working paper finds an increase in market pressure to hold more capital can ‘limit the ability of banks to expand credit’ and trigger a crisis