Risk
Bank of Canada governor highlights need to ‘incorporate uncertainty' in decision-making
Stephen Poloz says central bank uses ‘ranges rather than points' in its inflation and growth forecasts; estimates neutral rate of interest to be between 3% and 4%
Failure to improve culture will be punished, say Dudley and Tarullo
Fed officials say banks that fail to improve culture will face regulatory sanctions, including the possibility of being ‘dramatically downsized and simplified’
Basel Committee toughens bank governance principles
Principles aim to instil stronger risk governance in banks, after FSB peer review identified room for improvement; focus on responsibility of boards and ‘three lines of defence’
BIS paper tackles redistributive effects of regulation
Working paper studies how regulation tips welfare in favour of the real economy or financial sector, and suggests how regulators might deliver a Pareto improvement
Basel Committee finds banks’ op risk frameworks lacking
Review finds systemically important banks have made ‘insufficient progress’ in implementing op risk principles; Committee outlines recalibrated versions of its op risk capital models
Dombret calls on German banks to ‘embrace new risk culture’
Bundesbank executive board member sets out four criteria for assessing the ‘soundness’ of banks’ risk culture, including the ‘tone from the top’
Focus on risk culture is ‘remaking’ the banking system
Patricia Jackson highlights ‘big shift’ in banking as firms implement more rigorous risk frameworks; BoE’s Andrew Bailey sets out the PRA’s approach
FSB warns of ‘increasing signs of complacency' in financial markets
Concerns about the mispricing of liquidity risks are also raised at plenary meeting in Cairns this week, but ‘core of financial system continues to strengthen'
Kohn says exit from unconventional monetary policies likely to be 'positive event' for UK
External member of Bank of England FPC says ‘most likely all will go well' but warns long period of low volatility may have led to mispricing of risk
CPMI report reviews the ‘growing involvement’ of non-banks in retail payments
Working group chaired by Reserve Bank of India’s Padmanabhan says the presence of non-banks in payments raises 'level playing field issues' for central banks to consider
Maltese banks see increase in non-performing loans
The domestic banks in Malta had to increase their provisioning levels further to respond to the credit risk, notes central bank
RBNZ deputy ‘very satisfied’ with risk management review
Geoff Bascand praises the Reserve Bank of New Zealand’s enterprise risk management framework, which he says is a ‘powerful tool’ that will drive innovation across the central bank
Reserve managers ‘obsessed' with short-term results, says Passacantando
Former Bank of Italy managing director says central bank reserve managers should take a longer-term view with their investment decisions
Ingves says banking industry must acknowledge problem around risk weights
The variation in how banks set risk weights is a problem that some in the industry are ignoring, says Basel Committee chairman
German banks use interest rate swaps as substitute strategies for managing interest rate risk exposure
They also use on-balance-sheet adjustments of the 'duration gap', Bundesbank discussion paper looking at banks' interest rate risk management finds
Risk management technology provider of the year: OpenLink
Its versatility of infrastructure has allowed OpenLink to thrive in a changing technological environment to meet new central banking demands
Basel Committee says world's biggest banks can't report risk adequately
Globally systemic banks have provided the Basel Committee on Banking Supervision with an update on their progress towards risk reporting goals - revealing deficiencies in data aggregation
Banks respond differently to capital target deviations, ECB paper shows
Working paper finds banks tend to reshuffle risk-weighted assets or increase holdings when above Tier I ratio, but more inclined to increase equity levels when below target
BoE official calls for greater transparency on CCP margin modelling
Central counterparties should compete on quality of risk management, rather than a race to the bottom on margins, says Bank of England's head of payments and infrastructure
IMF paper presents Global VAR model for analysing banking and sovereign risks
Researchers develop a global vector autoregression model that incorporates forward-looking contingent claims into its analysis of banking systems, sovereigns and macroeconomic conditions
Malaysia deputy touts progress on money laundering, terrorism financing
Alshari Yahaya also notes due diligence in some instances remains inadequate and not reflective of the level of risks; says 'reward system' should reflect strong risk culture and performance
Buba paper: Banks with volatile loan demand load up on wholesale funds
Bundesbank discussion paper argues ‘loan uncertainty' not only result but determinant of wholesale funding, implying regulatory cap on wholesale funding increases exposure to ‘asset-side shocks'
Adherence to Islamic financing principles could benefit credit unions
Islamic savings products would make institutions more resilient, and possibly strengthen incentives for good governance, IMF working paper argues
Swelling profits explain rebound in risk appetite, San Fran Fed paper suggests
Research indicates corporate profit growth explains 40% of the decline in the spread between risky and risk-free bonds, according to economic letter by research vice-president