Capital
Business models at heart of 2023 banking turmoil – research
Unrealised losses and uninsured deposits were not main drivers of crisis, Chicago Fed paper argues
Can Bessent lower 10-year yields? Investors have their doubts
Unconventional tools won’t sway bond markets, say buy-siders, with yields as likely to go higher as lower
Fed’s NBFI scenario may be more use than CCAR – experts
Main severely adverse scenario does not capture contagion risks from any squeeze on non-banks
US dollar dominance: beyond the ‘exorbitant privilege’
Biagio Bossone argues that dollar ‘seigniorage’ extends into the very structure of global finance and its ‘exorbitant privilege’ is worth up to $804 billion annually
‘Trump slump’ hedges rise on rate cut fears
One dealer notes five-fold increase in number of clients hedging against possibility of faster easing
BoE proposes to ease regulations for small-scale lenders
Central bank suggests raising leverage ratio threshold from £50 billion to £70 billion
The interest rate dilemma in an uncertain world: a balancing act
Biagio Bossone makes the case for a holistic policy approach that includes extending IT tolerance bands, smart fiscal policies, supply-side reform and financial safeguards
Crypto custody a bit(coin) closer after US accounting U-turn
Federal banking supervisors expected to eventually relax regimes for safeguarding digital assets
State-owned banks must support real economy – PBoC official
Deputy governor calls on big lenders to take on greater role amid rumours of capital injection
Basel uniformity fades as members defy dress code
Rule-makers diverge from Basel III standards, denting aims of comparability and fuelling fears over fair competition
CRR III hangs in the balance as member states push for changes
Top EU lawmaker rejects calls to water down capital rules, while others see room for manoeuvre
Fed’s Barr tells regulators to ‘finish the job’ on Basel III
Not complying with global standards makes US banks less competitive, vice-chair for supervision says
Looming US Basel endgame redraft sparks calls to save IRB
Experts say 20 years of data makes credit risk models more appropriate than standardised approach
Trump, the Fed and climate’s undeniable systemic risk
Experts disagree on the impact of the Fed’s withdrawal from the NGFS but are united about climate change’s devastating effect on the financial system
Key lessons from 15 years of macro-prudential policy
Pedro Duarte Neves reviews how macro-prudential tools can be used for maximum effect
FSB: big banks could be sidelined from future rescue deals
Exacerbation of too-big-to-fail means G-Sibs could already be too large to take extra assets
Banks’ leverage ratio ‘over-calibrated’, says Fed’s Bowman
Heavy capital requirements causing illiquidity in Treasury market, governor says
Non-banks and banks are interwoven, says ex-RBI official
Policy-makers should study connections between them when crafting regulations, argues Viral Acharya
Book notes: Central bank capitalism: monetary policy in times of crisis, by Joscha Wullweber
This book asks if independent monetary policy is feasible at a time when central banks prop up the poorly regulated shadow banking sector
China tells insurers and mutual funds to buy more stocks
Regulators, including PBoC, provide new instructions to boost domestic equities market
Basel stops short on wrong-way risk
New guidelines a step in right direction, but experts warn they won’t prevent another Archegos
Rising corporate distress could trigger instability – IMF paper
Study says emerging markets particularly exposed as firms struggle with higher interest rates
Trump 2.0 bank supervision: simpler but no soft touch?
Republican FDIC vice-chair Travis Hill wants more focus on financial risk instead of process
Accounting for banknotes
Three leading experts on central bank finances debate the appropriate treatment of currency