Liquidity
Colombian paper finds ‘negligible’ contagion effects
Contagion in the interbank market poses no real threat to the Colombian financial system, working paper notes; examines link between bank failure and liquidity
PBoC injects liquidity following market rout
Central bank intervenes with $20bn reverse repo operation as markets slump, restoring a semblance of calm
Norges Bank paper seeks to improve modelling of money
Researchers aim to capture the role of money as both a medium of exchange and a liquid asset, with the resulting equilibrium underscoring the need for a liquidity coverage ratio
Malawi stress test shows three banks fall below Tier 1 requirement under minor credit shock
Latest stress tests show improved resilience but credit shocks remain greatest risk, Malawi’s latest financial stability report reveals
Rohde says resolution offers ‘genuine alternative’ to granting emergency liquidity
With the ability to recover or resolve firms in an orderly fashion, the National Bank of Denmark finds itself with an alternative to granting emergency liquidity assistance, governor says
Pakistan central bank ‘implicitly’ introduced new policy framework ahead of time
State Bank of Pakistan reveals it ‘implicitly’ introduced a new framework for monetary policy before it was officially announced, to avoid ‘unnecessary volatility’ in money market
Ugandan social security fund’s outside investments performing well, CIO says
Gerald Kasaato says investments in Kenya are performing well; greater use of external managers could be ‘very beneficial’ if restriction to East Africa investment is expanded
Peer-monitoring can help identify ‘distressed’ financial institutions, paper says
Colombian working paper presents early warning system which looks at the liquidity price market participants charge one another
Review sees 'fault lines' emerging in global asset management ecosystem
Monetary Authority of Singapore review urges financial industry to remain ‘vigilant’ against emerging risks
PBoC and ECB announce ‘successful’ swap line tests
Tests in April and November provided ‘symbolic amounts’ of euro and renminbi liquidity, involving a ‘limited number’ of counterparties
ECB flags threat of ‘abrupt reversal’ in risk premia
Latest review identifies two ‘medium-level systemic risks’ to the eurozone's financial stability, weak profitability prospects for banks and a potential ‘sharp adjustment’ in risk premia
Changing funding patterns cut both ways for emerging markets, central bankers say
Emerging markets are moving towards greater use of capital market funding, but while this could bring benefits for monetary policy, it also throws up a host of stability risks
Decisions on ELA could be shifted to ECB
Mario Draghi says ‘intricate’ framework for providing emergency liquidity assistance could be reviewed in light of banking union; potential for decisions to become ‘more European’
Open Forum: Market maker of last resort presents host of issues for central banks
Axel Weber and Minouche Shafik point to perils for central banks looking to step into the role of market maker during a liquidity crisis
Jamaica will require banks to have recovery plans to access emergency liquidity
Banks must provide recovery plans under new emergency liquidity facility, Jamaican bank governor says
BoE paper maps UK bank response to 2008 liquidity shock
Authors contribute to international study of banking networks, finding UK banks that grew faster pre-crisis responded more sharply to the liquidity shock in 2008
BoE researchers unearth further evidence of electronic trading driving liquidity shocks
Study of market liquidity finds episodes of volatility have centred on fast, electronic markets, and says broad trend has been towards greater use of electronic platforms
BoE’s Shafik unconvinced regulation is main factor driving volatile liquidity
Deputy governor says regulation ‘only part of the story’ of why market liquidity has experienced bouts of dramatic volatility, and offers opinion on what policy-makers can do to help
Liquidity issues demand further work, says BoE’s Cunliffe
Greater fragility of market liquidity requires reassessment of regulation, new stress tests and better data, BoE deputy says; private sector economists warn of distortionary effects from QE
Riksbank floats new collateral limits
Swedish central bank looks to limit the amount of covered bonds pledged as collateral for intraday credit; assessment suggests limited impact on banks
Research moots greater regulation of US Treasury market
The authors discuss the potential for incentivised or mandated liquidity provision by primary dealers and the introduction of designated market-makers to counter greater instability
Swap line availability not assured, warns Bill Allen
It is ‘not certain’ the Federal Reserve will be able to provide liquidity in the same manner in the future, Allen tells Central Banking
BoE may impose extra liquidity charges, says regulator
BoE will impose Basel III add-ons if banks’ risks are not fully captured by LCR, says prudential policy head
Fed’s Dudley: liquidity warnings a ploy to weaken regulation
'Most arbitrage trading has simply ceased,' while Treasury market depth has dropped from $500 million to $130 million, bankers say