Financial crisis
Slovenian economy assailed by austerity and money markets
According to central bank's 2012 annual report, inflation and credit costs increased as consumption, bank lending and the current account deficit fell
Customers of failing banks less likely to trust other people
DNB working paper says mistrust prompted by experience of crisis increases likelihood of bank runs and undermines long-term growth
Implicit government guarantees leads to increased risk-taking at banks
Fed discussion paper argues that strengthening market discipline by reducing bank complexity is needed to address moral hazard
Sovereign default spreads drove European bank risk exposures during crisis
Systemic risk of European banks reached its height in late 2011 at around €500 billion, based on a measure introduced in a recent Fed working paper
Lagarde tells central bankers not to 'rush to exit' on QE
Speaking at Jackson Hole, the head of the IMF said unconventional monetary policies were "still needed in all places it is being used" and that it was unclear what "exit" actually implied
Unemployment strongest predictor of mortgage default in the US
Atlanta Fed research finds that individual unemployment increases the probability of mortgage default by 5 to 13 percentage points compared with average sample
Swelling profits explain rebound in risk appetite, San Fran Fed paper suggests
Research indicates corporate profit growth explains 40% of the decline in the spread between risky and risk-free bonds, according to economic letter by research vice-president
Fed urges big banks to improve internal capital planning
Federal Reserve says lenders must strengthen methods for assessing risks; reveals 18 biggest US lenders face challenges in one or more areas
BIS paper weighs up early-warning indicators
Working paper examines which indicators are most effective at foreshadowing banking crises; uses a new statistical method based on particular policy requirements
Volcker rule in its ‘purest form' necessary to curb derivatives speculation
Under pressure from banks and hedge funds, the definition of ‘hedging' in the final Volcker rule could be so broad as to allow unchecked speculation dressed up as hedging, Vembar Ranganathan argues
Competition makes mutuals safer, commercial banks riskier
Bank of Korea research paper shows higher concentration in a less competitive loan market has increased default risks of mutual savings banks since the recent crisis
Central bankers should be wary of their political bargain with government
Central bankers appear ‘spellbound’ by governments keen to give them new regulatory powers despite concerns about their ability to deliver either stable monetary or financial policy in the future
ECB conflicted by Cyprus bail-in
The ECB’s failure to secure a bail-out for the Cypriot banking system changes the template for sovereign rescue in the eurozone. It also has implications for a central bank that appears conflicted
A status report on Dodd-Frank and the Volcker rule
As the US and Europe move closer to co-operating on derivatives legislation, Vembar Ranganathan looks at the status of Dodd-Frank implementation aimed at curbing excesses in the derivatives market
International banks pose risk to global financial system, NY Fed paper finds
Evidence from 2007 suggests banks can more easily deal with a credit crunch in their home jurisdiction than they can overseas, which could be a weak point in the global system, paper finds
‘Striking similarities' between eurozone and the pre-1914 gold standard
Both monetary arrangements provide underdeveloped peripheral countries with easy access to capital from the core countries, triggering asset price booms via the banking system in peripheral countries
Central Bank of Ireland director says it will take ‘some time' to get out of crisis
Fiona Muldoon adds the task now is putting together a business model for Ireland that ‘expands on parts of the economy not built on buying and selling houses to each other at ever inflated prices'
Consumers' inferior bargain position ‘largest issue to be tackled'
RBI's Deepali Pant Joshi says financial crisis had ‘highlighted the importance of financial consumer protection for the long-term stability of the global financial system'
European credit growth strongly related to net debt inflows, ECB paper finds
Analysis indicates there is a strong international dimension to the determination of national credit growth rates
Crisis altered ‘traditional factor' impact on EM capital flows, new paper finds
According to the authors, the crisis ‘brought very important changes in terms of degree, size and volatility of capital flows to emerging markets'
Bernanke: Past century shows ‘central banking doctrine and practice are never static'
Fed chief added recent crisis has underscored the need to strengthen and better integrate US monetary policy and financial stability frameworks
Finland economist provides euro crisis ‘view from the north'
Banking union will be key to avoiding a repeat of the eurozone sovereign debt crisis, writes Bank of Finland economist; dealing with the ‘legacy' of weak balance sheets is a ‘key open issue'
ECB’s Asmussen urges greater efforts at global policy co-ordination
Executive board member says globalisation has led to greater interconnectedness and many more sources of risk, but institutions have not kept pace with the demanding environment