Micro-prudential
IMF staff weigh options for tackling Chinese NPLs
Technical note authored by three IMF employees considers how securitising NPLs or converting them to equity might work in the Chinese context; latest CBRC figures show the stock is growing
Book notes: Lehman Brothers: a crisis of value, by Oonagh McDonald
McDonald's book offers a useful synopsis of the multiple failings at Lehman Brothers running up to 2008, but ultimately fails to add significantly to what was already known
BoE’s Cunliffe notes ‘gap’ between bank return and investor expectation
Investors should be prepared for lower returns in the coming year, Bank of England deputy says; risks to the housing market show signs of reducing but FPC poised to act if necessary
Time ‘ripe’ to consolidate public banks – RBI’s Gandhi
Consolidation could help banks spread their risk and compete on a global scale, deputy governor says – though they may need a “nudge” from government to get going
BoE paper seeks unified global approach to NPLs
A multidisciplinary approach to legal, accounting, statistical, economic and strategic elements of loan loss provisioning and NPLs
Hoenig warns reliance on long-term debt could represent systemic vulnerability
FDIC vice-chairman warns of danger of substituting long-term debt for equity and comments on disagreement with Fed over ‘living wills’
FinCoNet offers regulators chance to advance financial consumer protection – chairman
The association of national financial consumer protection agencies has made progress in supporting reform, but has considerable work ahead, chairman Sheridan says
Troubled Kenyan bank to reopen under new management
Chase Bank will be managed by Kenya Commercial Bank, which may go on to acquire majority stake; questions raised over pressures on small and mid-sized banks
Basel Committee opts for local discretion on rate risk
Committee abandons attempt to create common global standard for interest rate risk, opting instead to leave discretion with banks and supervisors in final standards
Carney stresses bank resilience in face of large shocks
UK banks display resilience when threatened with Brexit-like shock, stress tests show; London "unlikely" to retain global financial centre status if Britain leaves EU, Carney says
Minneapolis Fed to explore resolution alternatives in TBTF initiative
Neel Kashkari adds alternative resolution mechanisms to the agenda as Minneapolis Fed looks for solutions to the too-big-to-fail problem; discusses outcomes from this month’s symposium
Asylum seekers at risk of financial exclusion, EBA warns
European countries must ensure asylum seekers are not excluded from financial services by anti-money laundering rules, EBA says; calls on some authorities to take action
Central Bank of Cyprus activates deposit-guarantee scheme for failed bank
Central Bank of Cyprus activates deposit-guarantee scheme for creditors of a bank under administration; FBME's banking licence was revoked following US allegations of money-laundering
Central Bank of Kenya creates lending facility in wake of banking troubles
Emergency liquidity offered to any bank under pressure “from no fault of its own”, as fears mount over the resilience of Kenya's banking sector
Central Bank of Kenya places third bank in receivership
Chase Bank under new management after resignation of chairman and managing director; Imperial Bank progress “postponed” while audit continues
Coen looks to wider issues affecting bank resilience
Secretary general of Basel Committee highlights importance of corporate governance and culture, IT systems and stress tests for resilience and profitability
Basel Committee flags further issues with bank modelling
Second study of variation in credit risk modelling using internal ratings-based approach sheds further light on what is causing banks to calculate significantly different capital requirements
ECB clarifies national supervisory discretions
European Central Bank publishes a guide and regulation aimed at harmonising supervision of major banks within the eurozone
Some analysts see stress tests losing effectiveness – Stournaras
Greek central bank governor raises questions over perception of stress tests; regulators’ models need to take more account of national differences, he argues
Negative rates one of many pressures on bank business models, Lautenschläger says
ECB supervisory board vice-chair says business models must cope with a range of challenges, of which low rates are just one; Nouy and Lautenschläger field questions following annual report
Rosengren eyes balance between bank resilience and loans
Boston Fed president tells New York conference that supervisors should encourage banks to maintain lending when striving to meet capital-to-asset ratios, but stress the need for quick recapitalisation