Leverage ratios
BoE’s leveraged loan research draws interest from overseas
UK exposures are modest but firms in US and Japan have bigger holdings of CLOs, which carry echoes of the subprime mortgage crisis
PBoC’s Yi defends central bank’s easing measures
Cut in reserve requirements calibrated so as not to undermine deleveraging, governor says
Brainard reboots calls for countercyclical buffers
“Countercyclical capital requirements build resilience, unlike monetary policy,” Brainard says
BoE issues warning over global leveraged loan market
Scale, growth and lending standards similar to pre-crisis subprime lending, BoE reports
Basel III may be second-best outcome, admits Coen
Basel Committee secretary-general says framework could be strengthened; John Vickers renews calls for tougher capital standards
Stress tests show major UK banks should withstand ‘disorderly Brexit’ – BoE
All large UK banks surpass risk-weighted capital and leverage hurdle rates
Riksbank urges introduction of 5% leverage ratio
Sweden’s central bank sounds the alarm to fellow supervisor, urging action as housing market uncertainties begin to threaten financial stability
Monetary easing can harm growth in some open economies, IMF researchers suggest
Leverage constraints reduce domestic credit in monetary easing cycle, authors say
Basel Committee moots changes to leverage ratio
Regulation could be amended to mitigate central clearing impact; committee also critical of banks’ “window dressing” behaviour
Supervisory lessons: fault lines in prudential regulation
Former Bank of Spain head of supervision Aristóbulo de Juan highlights the lessons he has learnt about weaknesses in prudential regulation, in the second of a four-part series on supervision
BoE paper proposes composite measures to communicate UK financial stability
Authors aggregate indicators of financial stability into measures that could improve public communications
European Court of Justice overrules ECB on French banks’ leverage
ECB’s reasoning on treatment of French savings accounts was “manifestly incorrect”, court rules
NY Fed research ‘stress tests’ household balance sheets
Authors say it is “crucial” to track household leverage; vulnerability in the US “remains elevated”
Leverage ratio disincentives clearing – BoE paper
Leverage ratio appears to have made some banks less willing to take on new clients
BoE paper models bank runs in general equilibrium
Daisuke Ikeda finds regulations must be comprehensive to prevent risk shifting
Is the US dismantling Dodd-Frank?
Richard Heckinger asks whether recent amendments to the Dodd-Frank Act amount to technical tweaks or full-scale rollback
Fed proposes changing leverage ratios for largest US financial firms
Proposals would make leverage ratios “more closely tailored” to firm’s risk profile, Fed argues
BIS economists find frictions in banks’ dollar funding
Authors investigate wide divergence in the business models of European and Japanese banks
Global leverage may be higher than supervisors realise – IMF paper
Standard measures of leverage are too focused on balance sheets, researchers say
Fed hikes have created ‘paradoxical’ easing – BIS
Review draws parallels between current episode and “Greenspan conundrum” of mid-2000s
More work needed on supply channel of finance – BIS paper
Demand-side links between the financial and real sectors are better understood, say authors
PBoC’s Zhou warns China’s leverage is ‘relatively high’
Governor says corporate sector debt has ballooned partly due to local government financing vehicles
Fixing the banks is not enough – Adair Turner
Robust banks can supply credit but the real damage from financial crisis is caused by lack of credit demand, former FSA chief says
Zhou did not get what he wanted, but has not left empty-handed
The key five-year meeting in China has resulted in shift of focus to systemic risk and regulation, and away from liberalisation and innovation