Risk
ECB paper investigates policy effect on bank risk-taking
Working paper finds both positive and negative impact of monetary policy on bank risk-taking; suggests this makes it impossible for regulators to design optimal capital requirements
Banque de France paper highlights risks of financial markets opacity
Researchers find imperfect information on financial intermediaries’ exposures encourages risk-taking; suggest low interest rates and ‘gambling for resurrection’ raise systemic risk
BIS paper assesses impact of public recapitalisations on bank risk
Research analyses changes in risk levels in banks that required public funding during the financial crisis; finds no consistent evidence that rescued banks reduced their risk by more than other banks
Bank of Japan paper examines reasons behind chronic deflation
Working paper gives overview of a number of factors that may have caused persistent deflation in Japan since the mid-1990s; says it is difficult to single out a dominant explanation
BIS paper links funding to emerging economies and stock market volatility
Working paper studies funding flows between emerging market central banks and investors during stock market calm and volatility; suggests this reinforces risk-on and risk-off markets
Bank of Israel annual survey reports increased banking system risk
Annual survey of Israeli banking system says risk increased during 2011; outlines regulatory changes made to address the problem
Deutsche Bundesbank paper studies developments in financial connections
Discussion paper analyses changes in connectedness of financial institutions following financial crisis; suggests possible stability benefits created by bank bailouts
Bank of Canada paper warns of shock transmission multipliers
Working paper finds financial integration between countries leads to multiplier effects in the transmission of shocks; suggests greater investment causes greater correlation of output
World Gold Council says disinflation may support gold demand
Statistical commentary argues gold price may increase due to disinflation; says current economic environment ‘supportive’ of gold demand
ECB paper analyses risk-sharing in emerging markets
Working paper finds evidence of pro-cyclicality of capital gains on domestic stock markets; argues countries can hedge against risk by encouraging foreign investment
Bank of Lithuania takes next step in structural overhaul
New banking service aims to promote efficient investment operations and mitigate risk; comprises third step in central bank’s restructuring programme
Central Bank of Colombia paper analyses sovereign default risk
Working paper assesses main factors determining risk of Colombian government defaulting on its debt; finds different factors are important at different debt maturities
BoE paper studies impact of Lehman’s collapse on payments
Bank of England working paper studies the effect of the Lehman Brothers collapse on wholesale payment patterns; finds slower payments and increase in risk following the default
Bank boards have little time to focus on business risk, says Scotiabank chief
Canadian bank chief believes pressing need to meet raft of new regulations means top bankers have little time to focus on business risks; says ‘small’ and ‘uncomplicated’ banks fail too
BoE’s Jenkins discusses threats to financial system
Financial Policy Committee member considers dangers facing the global financial system; says future interventions to stabilise cross-border capital flows are likely
ECB paper models endogenous credit risk
Working paper discusses models of credit risk; authors argue that “feedback effects” have major implications for regulatory reform
Norwegian governor discusses fund risk rebalancing
Øystein Olsen considers need for pension fund to rebalance its portfolio in response to changing risk; argues that rebalancing is justified
IMF paper builds dynamic model of systemic risk
Working paper develops dynamic model of risk based on combination of underlying risk factors; finds this provides better warning signals than models with non-dynamic thresholds
Egyptian official recalls emergency planning during unrest
Manager of risk department at the Central Bank of Egypt describes what happened when social unrest took hold of the country; bankers decamped to a hotel in the suburbs to maintain services
JP Morgan loss was bungled attempt to cut Basel III RWAs, says Dimon
Loss-making unit's RWAs would have tripled under Basel III, JP Morgan chief executive says - but attempting to cut capital burden made its hedges more complex
Fed’s Tarullo calls for prompt action to regulate shadow banking
Fed board member Daniel Tarullo sets out 'more or less immediate' steps that should be taken towards regulating the shadow banking sector
BoE’s Haldane criticises financial models
Andrew Haldane argues that use of normal distributions in many financial models seriously underestimates risk
BoE paper assesses contingent capital risk
Financial Stability Paper examines contingent capital’s risk to stability when used to fulfil banks’ equity requirements; warns that such capital may cause wider problems
IMF paper examines financial intermediation costs in low-income countries
Working paper considers causes of high financial intermediation costs in low-income countries; finds that lack of competition and various bank-specific factors lead to high costs