Systemic risk
The Bank of Italy’s approach to risk-based budgeting
The financial crisis blurred the lines between Anglo-Saxon and continental European central bank models, presenting challenges when treating both the sources of risk and risk-bearing capacity using financial and accounting budgeting techniques
BIS report urges tighter global macro-pru co-ordination
Deputy general manager says global institutions could do more to promote co-ordination between advanced economies and “systemic middle-income countries”
SNB rejects idea of retail central bank digital currency
Governing board member Andrea Maechler says central bank digital currency would bring “incalculable risks”, and denies that crypto tokens are “comparable with” money
Bank of Uganda governor hits back at mismanagement claims
Central bank and government ombudsman are locked in conflict over a staff reshuffle
BoE’s FPC sees risks lurking in global debt markets
Committee highlights “material” global vulnerabilities, particularly in debt markets
Deregulatory bill gathers bipartisan support in US Senate
The amendment lifts the asset threshold beyond which banks are submitted to stricter oversight
ECB largely supports Commission’s proposals for ESRB
ECB president would become ex officio head of systemic risk body
Global uncertainty increases financial interconnections – paper
Researchers use a network approach to evaluate financial interconnectedness
BIS’s Carstens sees danger in rapid technological change
General manager says supervisors should ensure the banking system remains resilient amid numerous challenges to traditional business models
Implementing a holistic and dynamic risk budget
The National Bank of Denmark has implemented a dynamic risk budget that takes the bank’s unavoidable policy risks as the point of departure. The new approach has led to a reassessment of investment exposures and how they are rebalanced over time and…
CCP stress tests have found capital shortfalls – Esma
Small increases to stress-test scenarios would have left ICE Clear Europe “in material breach”
Ireland nominates Lane for ECB vice-presidency
Irish governor has a track record as academic economist and senior ESRB figure
Carney rejects accusations of ‘cognitive bias’ at BoE
Parliamentary committee members say BoE relied on inaccurate forecasts before Brexit, affecting policy decisions
Transparency: Central Bank of Ireland
The Irish central bank has made great progress in communicating in a candid and open manner with the people it serves
Better data needed amid rise of non-banks – BIS study
Survey of post-crisis banking structure finds sturdier core banking system, but risks shifting to periphery, raising the need for better surveillance
Lifetime achievement award: Perng Fai-nan
Pre-emptive financial reforms combined with flexible monetary and forex policies have enabled Taiwan’s veteran governor to provide economic stability, even during turbulent times
Short-selling bans increased instability – ESRB paper
Banks’ volatility, leverage and default probability increased by bans on short-selling – researchers
Central banks lack ‘firepower’ to combat financial crises, says report
Without interest rate cuts available, the next financial crisis could be much “longer and deeper”, Global Risk Report says
Auditors find ‘flaws’ in ECB’s crisis management framework
ECB must improve co-ordination with SRB and national supervisors – report
Core-periphery model of bank networks called into question
Researchers find multiple cores in the interbank market, posing different systemic risks
Fed proposes expanding risk regime to foreign subsidiaries
New consultation suggests widening the scope of the August 2017 proposals to foreign-owned operations
Complex instruments still pose systemic risks – paper
Discretion granted by financial reporting standards increases opacity and complexity, say authors
Policymakers need wider range of systemic risk models – paper
Researchers attempt to combine systemic importance and systemic risk approaches
Mario Draghi confirms Basel III is complete
Governors and heads of supervision grant final approval to the amended Basel III framework, but the parties fail to agree on sovereign asset treatment