Liquidity
PBoC sheds light on opaque liquidity measures
Central bank confirms injection of billions of renminbi via new ‘medium-term lending facility’ as part of efforts to offset weaker foreign exchange inflows
BIS paper finds liquidity regulation need not harm lending
Evidence from the UK implies banks reduced their interconnectedness, but did not cut lending to the real economy in response to tighter liquidity regulations in 2010
World's biggest banks $60bn closer to Basel III target
Internationally active banks $20bn short of Basel III target, compared with $80bn six months earlier, according to Basel Committee review
Final liquidity rules issued for biggest US banks
‘More stringent' liquidity coverage ratio will come into effect in January 2017; Fed adopts final rule on supplementary leverage ratio, asks for input on swap margin rules
Bundesbank paper explores liquidity shock transmission
Claudia Buch and Linda Goldberg summarise the findings of empirical studies conducted across 11 countries to explore liquidity risk transmission
Avinash Persaud calls on regulators to address ‘system-wide' risk mismatches; slams Solvency II
Forcing long-term institutions under Solvency II to behave like short-term ones will be the biggest contributor to systemic risk since Basel II, says Avinash Persaud in Central Banking journal
Central banks need significant discretion to make swap lines work, says ECB
The pricing, size and maturity of standing currency swap lines when activated need to be left to central bank discretion, ECB says in latest Monthly Bulletin; language is 'intentionally unspecific’
The challenges for central banks
Demands are being made for central banks to consider financial stability alongside price stability, as a key component of their monetary policy. But that is nothing new for central banks
IMF paper finds macro-prudential polices can help prevent liquidity traps
Researchers find that debt limits and insurance requirements can help prevent economic agents from accumulating excessive leverage and triggering liquidity traps
BoE scraps 170-year old weekly balance sheet ‘snapshot' to hide emergency liquidity
Bank of England to remove data on emergency liquidity provision from weekly statement, in a step away from full transparency in the interest of financial stability
'Intra-firm borrowing' reduces liquidity risk at 'global' US banks, say NY Fed staff
New York Fed staff report finds 'fundamental differences' between banks with and without foreign affiliates
Riksbank calls for separate LCR in local currency
Swedish central bank is wary of lenders' ‘extremely low' krona buffers; proposed change could be constrained by the size of Sweden's sovereign bond market, however
Ingves says responsibility for liquidity risk management lies with banks, not regulators
Basel Committee chairman says banks must develop controls to help them manage the liquidity risk that is inherent in their activities of maturity transformation
Central Bank of UAE opens first ever discount window
The Central Bank of the United Arab Emirates will introduce a standing liquidity facility next week, offering banks overnight loans at 100 basis points above official repo rate
ECB paper tackles liquidity ‘free-rider’ problem
Working paper highlights ‘excessive liquidation’ caused by financial intermediaries free-riding on other firms’ liquidity holdings, but says macro-prudential policy can create ‘constrained efficiency’
Major central banks phase out dollar liquidity operations
ECB, BoE, BoJ and SNB will start scaling back the amount of dollar liquidity they offer to market participants in April in response to waning demand
Banks with more interbank relationships meet liquidity needs ‘more efficiently’, finds Bundesbank paper
Discussion paper examines the link between interbank relationships and liquidity needs, using data from German banks’ use of ECB main refinancing operations
PBoC delivers on cash injection promises
People’s Bank of China uses standing lending facility and reverse repos to inject in excess of $37 billion into interbank market; releases statement to prepare market participants ahead of time
Bank of England launches new liquidity provision framework
First ‘indexed long-term repo operations' under framework unveiled in October scheduled for early February; will provide ‘more liquidity at cheaper rates, longer maturities against wider range of collateral'
RBI director discusses management of 2013 capital outflows
High and unstable capital flows can lead to macro and financial stability concerns. But managing capital flows to minimise such concerns has costs too, says Deepak Mohanty
Commodity price inflation caused by 'financialisation', RBI paper finds
Research also shows private liquidity is inflationary while official liquidity is not and and that derivative traders, active and passive, have played an important role in inflation dynamics
Liquid liabilities to become more expensive as a result of Basel III, says RBA's Debelle
New liquidity rules will make liabilities with less than 30 days to maturity more costly for banks to provide, making it a more expensive liquidity service for customers to obtain, says RBA assistant governor
Rajan outlines medium-term 'pillars' for improving India's financial system
The five pillars comprise a 'clarified' monetary policy framework and a more liquid sovereign bond market; nation would 'benefit enormously' from the elimination of 'poorly targeted' subsidies
Link between ECB liquidity ops and interbank repo breaks down in crisis
Researchers at the New York Fed find that the relationship between ECB monetary policy operations and interbank borrowing did not survive the collapse of Lehman Brothers and associated crisis