Liquidity
Regulations and QE impacting repo market – ECB’s Mersch
Executive board member says “confluence of factors” has boosted demand for collateral and impaired its supply, but the situation may improve
Non-banks may amplify risks from policy divergence, Nakaso warns
Non-banks may be less constrained than banks in supplying dollar funding, but it could dry up at the first sign of trouble; the BoJ starts stress testing foreign currency liquidity
Denmark to trial primary dealer payments in effort to boost liquidity
Central bank says payments in exchange for tougher requirements should improve liquidity, which has shown signs of weakening
FSB finalises recommended action on asset management risks
Set of recommendations tackle liquidity, leverage, op risk and securities lending; work on globally systemic designations pushed back until 2019
RBI moves to soak up liquidity generated by cash crisis
Deposits of old banknotes have led to surge in liquidity, which is now showing up as pressure on the bond market
Gulf central banks should act to boost liquidity – IMF report
Improved liquidity assistance frameworks, better forecasting and deeper Islamic liquidity markets would help ease conditions
Fischer: liquidity is mostly adequate but there are problem areas
Fed vice-chair recommends vigilance amid changing market structure, though he says problems are not widespread; SEC chief says she is “deeply concerned” on bond market liquidity
BIS’s Shin links dollar strength to global malaise
Head of research outlines how dollar strength affects leverage globally, causing deviations from covered interest parity and potentially impacting growth and trade
HKMA expands offshore renminbi liquidity scheme
List of banks provided with liquidity for offshore renminbi market-making grows, with extra measures designed to boost transparency
Central Bank of Solomon Islands commits to promoting private sector credit growth
Levels of liquidity “more than adequate”, latest monetary policy review says; central bank to maintain levels of liquidity by continuing to issue bills
Book notes: Connectedness and contagion, by Hal Scott
Scott’s argument on the dangers of contagion has many appealing features, although he may be too eager to hand powers to unelected officials, writes Michael Reddell
Independence, liquidity and a level playing field – yet another impossible trinity?
Jesper Berg warns it will likely be impossible to balance the demands of monetary policy independence, liquidity standards and achieving fairness for all banks
Global sharia standards desirable, but impractical – Lebanon’s el Gemayel
Complete standardisation impractical, but other options are available, says Central Bank of Lebanon’s Joëlle el Gemayel; Islamic banking landscape is shifting
Better swap lines could support global co-operation – BIS’s da Silva
Improving the global network of swaps, particularly between advanced and emerging economies, could create a more stable system, deputy general manager says
Sama intervenes to ease liquidity pressure on banks
Saudi central bank makes deposits worth over $5 billion at commercial banks struggling with low liquidity, and introduces new repo facilities
Stress tests should consider wider range of resilience metrics – BoE article
Metrics including liquidity and funding resilience should be considered as stress tests become an important part of a central bank’s regulatory toolkit; current liquidity and funding stress scenarios are “less advanced”
Liquidity stress testing ‘essential’ – ECB supervisor
Supervisor warns conference that banks will need to shape up their internal liquidity adequacy assessment process responses for 2017
Post-crisis banking regulations increase large firms’ funding advantage – paper
Banque de France working paper presents a large-scale DGSE model with large and small firms to analyse the impact of new banking regulations
FSB sees limited evidence of regulatory side-effects
Global financial reforms appear not to have had a significant impact on market liquidity or emerging markets, and have helped prevent the global system from fragmenting, authority says
Bank of Zambia begins liquidating three financial institutions
Commercial Leasing Zambia, Cetzam Financial Services and Genesis Finance to close with immediate effect; those affected have 30 days to file objection to the courts
RBI launches bond market shake-up
Host of measures aim to develop markets, increase participation and improve liquidity in Indian capital markets, following review by former deputy governor Harun Khan
Danish research examines how central banks can impact market liquidity
Price of liquidity tends to change on days when central bank is operating in markets, with aggregate liquidity and payments activity also important, PhD thesis finds
BoE researchers outline risk of collateral collapse
In stress periods, collateral chains could break, paper in forthcoming Journal of Financial Market Infrastructure warns
Turkish central bank steps in to calm markets in wake of coup attempt
Central bank promises banks unlimited liquidity as failed coup sends shockwaves through markets; economists say banking sector is holding up so far but has some vulnerabilities