Risk
Riksbank launches new financial vulnerability metric
“Systemic risk indicator” is designed to track overall financial stability across market segments
Bank Indonesia criticised after direct purchase of government debt
World Bank economist warns primary market purchases could undermine confidence
ECB’s Enria unsure banks will dip into capital buffers
Anxiety over investor and rating agency reaction may limit banks’ use of Covid relief measures
Banxico forecasts Mexican economy could fall by 8.8% in 2020
Central bank stresses the profound uncertainty to which the economy is subject
The complex art of reserve management
The coronavirus lockdown represents another inflection point for central banks seeking to optimise the management of their $12 trillion in FX reserves
The impact of AI adoption on supervisors
MAS’s former data chief says a triad of basic AI training, supervisor data scientist hubs and suptech adoption create strong foundations
Book notes: In the combat zone of finance, by Svein Harald Øygard
A fascinating and readable book for those charged with maintaining financial stability and interested in a new perspective on institutional efficiency
CBRT battles external imbalance with dwindling reserves
Turkish central bank loses battle to keep lira under 7 as reserves shrink, but pressures may be easing
Fed could purchase $750 billion of corporate debt in new facilities
Fed clears staff to purchase investment- and non-investment-grade debt and ETFs
Carbon tax spike could spur global recession – S&P
Higher carbon prices would trigger widespread industry defaults, says agency research unit
Basel Committee ‘stock take’ highlights progress on climate risks
Members are conducting research and issuing guidance, but most are not yet making changes to capital frameworks
Charted: rush for dollar liquidity fades
Figures from central bank dollar repo facilities show waning demand, but outstanding swaps still high
Libra’s Disparte on big tech’s move into digital currency
Libra Association vice-chair Dante Disparte speaks about the decision to abandon a multi-currency reserve, stress-testing a global payment network and how the Facebook-backed body still has 3 billion customers in its sights
Coronavirus latest: Central banks respond to the Covid-19 crisis
Live coverage as central banks respond to the virus outbreak (live feed is now closed)
RBNZ’s Sam Allen on embracing the cloud
Central bank took a calculated risk in moving its financial markets group to a cloud platform
Banks’ ‘geographic complexity’ raises some risks and cuts others – BIS paper
Global reach has complex effect on banks’ risk profiles, authors find
FSB consults on cyber attack ‘response and recovery’
“Efficient and effective response” is critical to minimising the financial stability impact, report says
Policy-makers making risky ‘one-round bet’ on Covid-19 – El-Erian
Former Pimco chief worried about readiness and ability of policy-makers to tackle a ‘second wave’ of infections
IMF urges countries to use fiscal firepower against Covid-19
“Do whatever it takes, but make sure to keep the receipts,” says IMF fiscal chief
FSB co-ordinating Covid-19 response – Quarles
Board is focused on protecting financial stability both during and after the pandemic, chair says
El-Erian on Covid-19 policy risks, ‘zombie’ markets and central bank capture
Former Pimco chief says Fed move into high yield is a step too far, new rules needed on leverage and false liquidity, and narrow window emerges for central banks to shed some of their policy load
FSB outlines 10-point plan for tackling global stablecoin risks
Some powers already exist but stablecoins may cut across regulatory boundaries, report says
Transfer season
Trade frictions with the US have caused a mass industrial transfer to China’s neighbours. Zhou Chengjun, IFF Academic Committee member and inspector of the Macro‑prudential Policy Bureau of the People’s Bank of China, says that shouldn’t stop China…
Beware of capital: much ado about nothing?
Capital increases can be offset by asset valuation, provision and income recognition forbearance