Financial crisis
Book notes: Respectable banking, by Anthony Hotson
The author’s sensible goal of “respectable banking” is admirable, but the recommendations would not all help to achieve this
Public debt in low-income countries rising to risky levels – IMF
The fund recommends official creditors co-ordinate their response to debt crises
Canada’s Wilkins calls for improved macro frameworks
Bank of Canada deputy highlights the importance of better models and improved data in understanding impact of monetary policy on stability
Supervision hampered by fragmented banking regulation – Lautenschläger
Current framework needs wider scope to secure a safer financial system, ECB supervisor says
New York Fed director involved in selecting new president resigns
David Cote stepped down shortly after the institution revealed it was considering “a handful of final candidates”
Fed’s unconventional policies similar to measures in 1920s, says research
Market operations early in the 20th century more than tripled Fed’s Treasury portfolio
BoE changes stress test framework but keeps scenario the same
Stress tests will attempt to gauge impact of IFRS 9
Norway maintains countercyclical capital buffer at 2%
Norges Bank advises the government not to reduce the buffer because of high household debt
PBoC set for new governor
President Xi Jinping’s adviser Liu He widely expected to be named next PBoC governor
ECB publishes updated NPL guidance
Central bank recommends stricter framework than European Commission
European Commission calls for action on NPLs
Commission’s proposals differ from ECB’s October document
BIS’s da Silva defends DSGE modelling efforts
The models have not performed as badly as critics claim and new research efforts are creating fresh possibilities, says BIS’s deputy general manager
Return of volatility helps shatter market illusions – BIS’s Borio
Quarterly review focuses on recent market gyrations; researchers outline new early warning indicators for financial stress
Richmond Fed economists weigh idea to prevent bank runs
“Priority” bank accounts could force customers to reveal whether a run is developing
Zhou says China is ready for bolder reform
Zhou Xiaochuan comments on further progress with liberalisation and financial market reforms in what is likely to be his last press conference as PBoC governor
Paper warns emerging markets of pitfalls of credit easing
While the effects of credit easing are benign for advanced economies, developing and emerging countries may experience macroeconomic repercussions
ECB criticises Irish draft law on mortgage arrears
Draft law could encourage moral hazard and harm legal certainty, says ECB
Deregulatory bill gathers bipartisan support in US Senate
The amendment lifts the asset threshold beyond which banks are submitted to stricter oversight
NY Fed paper studies when government should issue safe assets
Model implies only under certain situations should the government issue new debt; changing inflation target might be superior
Italian paper looks at eurozone firms' capital costs
Fall in borrowing costs in periphery due to balance sheet improvements, researchers find
Authorities can’t rely on monetary policy to fight next crisis – Rohde
Danish governor says rebuilding capital buffers should be a priority
Canada’s polymer versus paper substrate cycle
Empirical evidence indicates the switch to a polymer substrate has improved the lifespan of Canadian banknotes, write Ramesh Paskarathas, Lynne Graaskamp, Erik Balodis and Theodoros Garanzotis
Researchers develop new index to measure geopolitical risk
Heightened threats slow growth and equities returns in advanced economies, paper finds
IMF stresses communication’s role in fostering stability
Neglecting its importance can lead to adverse reactions, such as misinterpretation of policies