Risk
ECB launches climate risk stress tests
Exercise will feed into SREP and could indirectly affect lenders’ capital ratios, ECB says
Fed signals time will be right for rate hike ‘soon’
QE set to end in March, with balance sheet to start shrinking after rates rise
Two-thirds of central banks have a centralised risk unit
Central banks with a centralised risk unit tend to use KRIs
Responsibilities and risk management changed at 43% of central banks
Responsibilities modified over last two years required parallel developments in risk management
Banks can exploit imperfectly informed investors – BIS paper
Some banks gain additional funding from investors who underestimate their credit risk, analysts find
Minority of central banks define project risk appetite
Institutional risk and delegated risk appetites defined more often
Bank of Canada pilot explores transitional risks of climate change
Six financial institutions joined the central bank and financial regulator in auditing their assets
Financial risk most staffed function
Risk management team sizes vary considerably between central banks
Experts urge OCC to include climate risk in bank exams
Regulator’s proposed principles are step in the right direction, but still behind Europe
Over half of central banks have a chief risk officer
Most have a risk management committee
Minority of central banks use GRC platforms
RSA Archer and SAP named as providers
ISO 31000, COSO-ERM are influential risk management approaches
IOWRG, Basel and NIST also used by central banks
Over half of central banks modified collateral policies during the pandemic
Most reduced haircuts on banks’ collateral
Few central banks cover environmental risk
Central banks list environmental risk as a minor source of risk
Cyber security risks rose most in the past year
Operational and market risks also increased
Reputational risk tops central bank concerns
Cyber security and credit/counterparty risk followed
Down but not out: US Libor trading continues amid ban
Outgoing rate hits market share lows in US swaps but little dent made in listed markets
The longest book ever written?
The Single Rulebook on EU financial regulation is a serious contender for the prize of the longest book ever written. But will it deliver a safer and better financial system?
2021: The year in review
The year has seen central banks switch from recovery mode to battling inflation. Central Banking looks back at the stories that made the biggest impact in 2021
US prime fund swing pricing proposal sparks industry alarm
Some fear SEC rule would repel investors; high liquidity requirements could make funds uneconomic
How to solve the payments privacy paradox
Anonymous CBDC has major drawbacks, but privacy in payments can still work, says Dave Birch
US FSOC zeroes in on climate change
Annual report warns “disorderly” policy changes raise the risk of “sudden and disruptive” effects
FSB finds banks grew faster than non-banks in 2020
Pandemic response contributed to stronger growth in bank and central bank assets, report says
RBI launches action plan to tackle weak non-banks
“Prompt corrective action” framework echoes rules in place for banks