Liquidity
Exchange launches asset-backed coins for asset managers
Asset managers will be able to trade physical assets directly with each other through new asset class dubbed ABCs, which will be tradeable on newly launched exchange Abacas
Fed's Tarullo sees few signs of illiquidity in OTC markets
Fed governor says markets are in transition, while many actors are telling the Fed that it is harder to move large positions
WEF panel sets out plan to develop African capital markets
Rwanda governor says more domestic savings and deeper markets necessary for development; private sector participants praise integration in East Africa
Central bank liquidity surge is not without historical precedent
Major central banks have injected $14 trillion of liquidity into the global economic system, but such surges are not without historical precedent
RBA deputy governor shares lessons on collective investment vehicles
Philip Lowe discusses the risks associated with maturity transformation in the country’s growing asset management industry; says disruptions can be managed
Collateral impact from eurozone QE still unclear, says Euroclear’s Evenepoel
Effect of new liquidity regulations and eurozone quantitative easing on collateral is still uncertain, but the market is ‘always creative’, according to Euroclear’s head of treasury
Bank of Korea paper investigates link between liquidity and commodity prices
Researchers find certain commodity prices became more sensitive to global liquidity following the 2008 financial crisis
BIS committees highlight broad monetary effects of regulation
Committees offer suggestions for mitigating the impact of new regulations on the conduct of monetary policy, but say the effects will largely be ‘limited and manageable’
IMF researchers explore central bank security issuance
Working paper finds low-income countries may struggle to issue central bank securities on account of the administrative costs and infrastructure demands
Euro tumbles as ECB accelerates asset purchases
Euro slides against the dollar as market reacts to ECB’s plan to ‘moderately front-load’ its asset purchases; Cœuré concerned by ‘rapidity’ of price reversal in sovereign bonds
Repo market coping with liquidity regulations for now, panellists say
Participants at Euroclear’s Collateral Conference say repo markets have delivered new efficiency gains to keep collateral supply up, but the outlook over the coming year looks less certain
High liquidity creation increases probability of bank failure, IMF paper warns
Working paper published by the IMF says regulators can reduce costs of bank failure by identifying high liquidity creators early and monitoring them closely
Bank of Canada plans changes to operating framework
Changes would see Canadian central bank cut back on purchase of government bonds through primary market, while intervening less frequently in overnight market
BoJ’s Sato outlines efforts to reform repo market
Board member says Bank of Japan is seeking to improve repo market functioning with reforms targeted at transparency, stability, efficiency and globalisation
Constâncio suggests new shadow bank powers for Esma
ECB vice-president again underlines need for supervisors to take on new tools and responsibilities for tackling shadow banks, but suggests at least some may be wielded by other bodies
PBoC steps up support with reserve ratio cuts
People’s Bank of China cuts the ratio for the second time this year, with observers pointing to pressure on the monetary base from foreign exchange outflows as a motivating factor
Financial stability risks on the rise, IMF warns
Global financial stability report warns risks have increased and ‘rotated’ in the past six months, with emerging markets now more vulnerable
BoE calls for investigation into market liquidity risks
Financial policy committee concerned that investors assume liquidity will be available when they need it, despite recent fragility; BIS research highlights paradox in liquidity buffers
Hellwig and Wolf question efficacy of financial reforms
Martin Hellwig and Martin Wolf discuss flaws in financial reforms aimed at breaking the sovereign-bank linkage in book on country and political risk
Nalm Europe: Markets may be struggling to digest news, warns BoE’s Salmon
Liquidity droughts and high volatility seem to be increasingly common – not necessarily problems in themselves, but the threat of contagion is becoming a concern, BoE markets director says
Nalm Europe: Scope for improved risk modelling, says RBNZ’s Bascand
Central bank has already gone some way towards revamping its financial management but there is ‘scope to improve further’, deputy governor tells Central Banking conference in London
ESRB group wants treatment of sovereign debt reviewed
Report published by European Systemic Risk Board argues sovereign debt can no longer treated as risk-free, and outlines different ways the regulatory framework could be adapted
BIS paper says liquidity regulation should not replace lender of last resort function
Lender of last resort and liquidity regulations perform separate roles, and therefore one cannot replace the other, working paper says
Yellen sees ‘room for improvement’ on risk management
Fed chair says banks have strengthened their risk management, internal controls and governance, but more can be done and supervisors will be ‘watching closely’