Risk
BoE’s FPC in line for powers over buy-to-let market
Government proposes handing central bank powers of direction over LTV and ICR limits for buy-to-let mortgages, over a year after the BoE first requested them
Bonus cap may impact other pay regulation, research from Bank of England warns
Researchers see potential for bonus caps to clash with other remuneration regulation; level of pay ‘at risk’ declines
Bank of Canada identifies ‘prolonged weakness’ in commodity prices as a key risk
Latest financial system review suggests the resulting stress would be ‘manageable’, although an additional ‘large and broad-based drop’ would pose a bigger problem
EU survey calls for more cohesion on cloud computing
There appears to be a lack of clear and formal guidance from financial supervisors on banks’ use of cloud-based IT services, while their use is underestimated, an EU agency says
Banks may need major overhaul to handle new disclosures, FSB task force says
Many banks will need to make ‘substantial changes’ to systems and processes to cope with new and more complex standards on accounting for expected credit losses, report finds
Banking union prompts ‘strategic refocusing’ at EBA
Andrea Enria sees banking union as ‘game changer’ for EBA; sets out three ‘lines of action’ to approach new landscape
ECB flags threat of ‘abrupt reversal’ in risk premia
Latest review identifies two ‘medium-level systemic risks’ to the eurozone's financial stability, weak profitability prospects for banks and a potential ‘sharp adjustment’ in risk premia
Eurozone banks face 'in-depth' scrutiny of risk handling, Nouy says
Banks’ handling of risk is being subjected to in-depth analysis by the ECB’s single supervisory mechanism, Danièle Nouy says
Banks face higher capital requirement under Basel trading book review
Basel Committee impact study on the fundamental review of the trading book implies minimum capital allocated to market risk will rise substantially for some banks
Statistical spin may decide severity of trading book rules
Capital increase levied by Basel Committee on Banking Supervision could depend on use of mean versus median figures
EBA launches consultation on credit value adjustment risk
The European Banking Authority launched a public consultation on regulating credit value adjustment risk; aims to create a ‘common European approach’
FSB refines shadow banking definition with new ‘activity-based’ measure
Attempt at greater precision estimates shadow banking sector represents around 30% of non-banks; final framework for securities financing transactions published
UK authority calls on banks to help tackle cyber crime
UK National Crime Agency calls on banks to collaborate with authorities to reduce fraud
‘Disclosure task force’ can tackle climate risks, FSB says
Industry-led group would develop voluntary disclosures relating to climate change; Mark Carney says better information could head off a ‘climate Minsky moment’
CFTC’s aim is 'not just' to expand clearing, Massad says
The agency will not 'mandate a lot of products just to increase clearing'
State Bank of Pakistan overhauling risk management, annual review says
Central bank is looking to improve its risk management approach, with work proceeding on an enterprise risk management system
Sovereign debt holdings ‘significant’ driver of insurer risk, Bundesbank paper says
Insurance companies at risk from holdings of sovereign debt, and current regulation does not adequately deal with problem, paper argues
Outlook for emerging markets not as ‘gloomy’ as people think, BoE’s Forbes says
Bank of England MPC member Kristin Forbes warns pessimism may be ‘overshadowing important differences across countries’ and strengths in some economies
Ingves laments complexity in Basel trading book
Basel Committee chair says he would have preferred a simpler approach to market risk; work on other risks will tend towards greater simplicity, and will likely include external credit ratings
SNB’s Zurbrügg says negative rates painful but necessary
Vice-chair concerned by financial stability impact of negative interest rates, but says they make sense from a monetary policy perspective; talks with industry have been ‘very heated’
Lagarde calls for ‘policy upgrade’ across the globe
Managing director of the IMF tells advanced economies to ‘fully incorporate’ spillovers in decision-making, and eurozone to tackle problem with non-performing loans
Basel Committee considers limiting bank modelling choices
Study of internal models of counterparty credit risk finds ‘considerable’ variation between banks, raising the possibility of the Basel Committee takings steps to increase consistency
Cyber attacks could represent systemic threat, warns Ireland’s Roux
A string of cyber attacks on financial institutions could start a ‘domino effect’ that triggers a financial crisis, so firms need to improve their defences, deputy governor says
Belgian paper explores link between monetary policy and risk-taking
Model suggests central banks should stabilise the path of the real interest rate more when there is a ‘risk-taking channel’ of monetary policy, to help reduce ‘welfare detrimental fluctuations’