Stress tests
BoE runs ‘reverse stress test’ to prepare for renewed Covid crisis
Banks may have to take drastic “defensive actions” if UK suffers another major shock, BoE says
Q&A: New York Fed’s Stiroh on climate change and Covid
Co-chair of Basel task force discusses possible supervisory approaches to climate risk
How the Fed’s Covid stress test got stuck in the middle
Experts fear CCAR add-on has neither informed investors nor guided capital management
BIS warns of further shockwaves in ‘generation-defining’ crisis
Solvency crisis is looming on the horizon and health crisis is far from over, BIS officials say, as they present the 2020 annual report
Funds warm to Esma liquidity rules after Covid crisis
Funds are embracing stress-testing, and swing pricing, after “a real liquidity crisis” in March
Fed caps dividends after stress tests show big potential losses
Brainard says decision not enough as tests show loan losses could exceed those during financial crisis
NGFS unveils climate stress-test scenarios
Group releases guidance document and data to help central banks tailor climate stress scenarios
Fed to assess banks’ management during Covid-19
Supervisors evaluating business and operational strategies, cyber security and market risk assessments
BoC must accelerate climate efforts, new governor says
Tiff Macklem seizes opportunity to set out views on climate change in first public appearance as governor
ECB testing banks’ ability to deal with a second wave of Covid-19 – Enria
ECB head of supervision stresses banks are reluctant to use buffers because of market reaction
Mass bankruptcies should feature in Fed stress tests – former officials
Crowding of bankruptcy courts can effectively double loss given default, says Jeremy Stein
BoE paper lays foundation for ‘system-wide stress test’
Economists develop framework linking banks, investment funds and hedge funds
US banks should prepare for uneven recovery – Patrick Harker
Banks “shouldn’t be issuing large dividends at the moment”, Philadelphia Fed chief says
BoE axes 2020 stress test and gives supervisory guidance
IFRS 9 a challenge for firms given high uncertainty over virus impact
Carney sets out ‘grand unifying theory’ of macro-pru
Loss function for financial stability echoes format of Taylor rule, but requires much more judgement; speech is Carney’s last as BoE governor
Fed unveils new capital regime to criticism from Brainard
Federal Reserve says new rules will maintain capital levels, but senior official calls them “imprudent”
Book notes: After the crash, by Sharyn O’Halloran and Thomas Groll
The book seeks to identify seeds of the next crisis, and the overriding impression is a plea for more regulation
Stability versus solvency
There is still far too much regulatory forbearance on troubled bank debt. More on-site inspections and genuine writedowns are needed to fix the banking system
BoE’s Taylor argues for solution to IFRS 9 ‘headache’
Loss provisioning rules could worsen downturns and present issues for stress-testing, official says
Interview: Luiz Awazu Pereira da Silva
BIS deputy general manager talks about the obstacles central banks face with regard to climate change and why the status quo needs to evolve
Fed could postpone stress buffer beyond CCAR – experts
Delays prompt speculation that the new rules will only be known after the stress-test results in June
Stress test capital buffer ‘on track’ for 2020 testing – Powell
Plans were floated nearly 22 months ago, but Fed yet to offer final rule
Fed to stress-test banks’ leveraged loan exposures
Test features leveraged loan shock; scenario includes biggest-ever rise in unemployment
Fed’s Quarles warns big balance sheet could harm credibility
Fed official proposes tweaks to discount window and G-Sib surcharges to improve monetary framework