News/Financial Stability
Eurozone banks tighten standards as loan demand grows
European Central Bank’s second quarter lending survey shows banks toughening standards for borrowers, reflecting unease from sovereign debt crisis spillover; demand, meanwhile, increases
King parries claims Bank will get too much power
Bank of England governor Mervyn King says creation of the Financial Policy Committee will not make central bank too powerful
King stresses wait-and-see approach to rate-setting
Bank of England governor Mervyn King dismisses suggestions that one or another view dominates rate-setting committee; deputy Charles Bean reiterates question marks over effects of quantitative easing
Cross-border collateral may alleviate dollar funding strains: Emeap
Executives’ Meeting of East Asia Pacific Central Banks says crisis revealed shortcomings in regional money markets; swaps deals, cross-border collateral could alleviate some problems
Basel III features win governors' seal of approval
Group of Governors and Heads of Supervision, which oversees Basel Committee, okays parts of forthcoming Basel III proposals; calibration and phase-in arrangements to be finalised in September
Westminster spells out Bank’s importance in new regulatory structure
Bank-led committee will instruct prudential regulator and consumer body on policy; Treasury asks industry players for input on broadening new body’s objectives
EU stress tests detail exposure to Piigs debt
Stress tests show which banks are heavily exposed to riskiest sovereigns
UK lawmakers launch inquiry into regulatory revamp
Influential Treasury Select Committee says it will launch investigation of government plans for new regulatory structure
ECB insists stress tests are credible
ECB denies claims stress test scenarios were not severe enough
Dodd-Frank starts to bite as Obama signs bill into law
US President Barack Obama draws a line under year-long legislative process, hailing bill’s benefits to consumers; ratings agencies flustered by exposure to ‘expert liability’
ECB will always end up bailing out sovereigns: Buiter
Former Bank of England rate-setter Willem Buiter says ECB will lose in “game of chicken” with finance ministries over who rescues sovereigns
Hungary prepares bracing bank tax, wage caps
Hungarian parliament set to approve hefty bank levy to shear budget deficit; public sector wage freeze will affect central bank employees, despite ECB protests
Laos to liberalise cross-border transactions
Laos notifies IMF that it accepts plans to adopt measures that will end restrictions on international payments and transactions
US deposit insurance ceiling permanently raised to $250,000
Dodd-Frank law makes temporary $250,000 limit permanent; Federal Deposit Insurance Corporation says new law will apply retroactively
Faulty paper halts note production at De La Rue
Banknote printer De La Rue suspends production at its Hampshire plant owing to paper fault; shares plummet on company statement that 2010 production and sales will be affected
Price stability rightly remains sole focus of monetary policy: IMF
Fund directors say macroprudential measures, rather than monetary policy tools, should deliver financial stability; propose measures including dynamic provisioning framework
Estonia upgraded on euro accession; Ireland knocked down on banks’ weakness
Fitch lifts Estonian credit rating two notches, citing benefits of eurozone membership and strong fiscal performance; Moody’s downgrades Ireland on poor growth projections, worries over bad bank
Volcker philosophical on weakened rule, reform bill
Former Fed chairman Paul Volcker says failure to include dollar limit on banks’ positions in hedge funds “disappointing”, but accepts need for political compromise
Nigeria’s bad bank comes to life
Nigerian President signs bill approving creation of bad bank to take $10 billion in toxic loans off beleaguered banks’ balance sheets; agency to be up and running by end-September
HKMA unveils design of two new banknotes
The Hong Kong Monetary Authority says improved security features on new banknotes will reduce counterfeits in circulation
Euro counterfeits fall by 13%
ECB statistics show 387,000 forged euro banknotes recovered in first half of 2010; €50 note overtakes €20 as most popular bill to fake
HKMA, PBoC agree to expand renminbi business
New agreement will enable banks in the territory to establish renminbi accounts for financial institutions
East Asian, Pacific governors set for 15th annual meeting
Executives’ Meeting of East Asia and Pacific Central Banks gears up for 15th outing in Sydney; regional currency and financial stability issues to dominate agenda
Fed is the main winner from Dodd-Frank bill: Meyer
Former Federal Reserve governor Laurence Meyer says the central bank has gained powers it wanted and shed responsibilities it did not, despite initial anti-Fed sentiment among lawmakers