Liquidity
European supervisors flag rising liquidity risks
Supervisors raise concerns over growing market liquidity risks, warning of the combined impact of technology, regulation and competition; asset managers a potential source of contagion
BIS paper finds emerging market corporations exploiting carry trade
Study of emerging market foreign currency-denominated bond issuance by Bruno and Shin finds corporations appear to be issuing bonds as part of a carry trade, rather than financing investment
BoJ’s Nakaso: ‘No serious problems’ with JGB liquidity
New data shows a drop in market depth, but QE is not threatened, says deputy governor
Iranian deputy points to economic turnaround since Rouhani took office
Deputy governor says central bank has managed to impose new discipline on the economy, but sees room for improvement in the broader Islamic world
CLS develops cleared FX settlement service with LCH.Clearnet
Designed specifically for central counterparties and cleared FX products, the service aims to minimise risk in the industry
Bundesbank research warns of risks from rising intraday interest rates
Discussion paper finds intraday rate rose from zero to around 60 basis points after 2008 and sovereign debt crises; researchers suggest it is reflecting a liquidity premium
BIS paper models optimal response to unconventional shocks
Authors examine how macro-prudential policy ought to respond to news shocks and regime changes in global liquidity, finding ‘significant variation’ in optimal policy reactions to shocks
Bank of Korea research tots up damage from capital flows
Researchers attempt to measure the impact of foreign financial flows on the real economy, finding the type of flow matters for growth, but all types increase volatility
RBI automates liquidity operations
Central bank launches straight-through processing for three of its liquidity operations, cutting settlement times as part of broader efforts to enhance liquidity management
Commodity trading advisers unmoved by liquidity concerns
The biggest liquidity snags for CTAs are in placing large orders - something which AHL and ISAM say impacts them little
Bundesbank paper tracks causes of financial crisis balance sheet contraction
Working paper identifies characteristics and behaviour that had a dampening effect on German banks during the 2008 crisis, noting the importance of taking a nuanced view
IMF researchers find FX interventions can help tackle pressures from global capital flows
Working paper penned by team including Olivier Blanchard takes new approach to endogeneity problems, finding foreign exchange interventions can stem appreciation pressures from global flows of capital
Reform of Sterling Monetary Framework is ‘ongoing’, says BoE’s Salmon
Executive director for markets highlights potential for sharia-compliant facilities to be included in framework, among host of possible future developments
Zimbabwean governor says banks more stable
John Mangudya says the banking sector ‘remains safe and sound’ after the Reserve Bank of Zimbabwe moved to address credit risk and liquidity constraints
IMF wants new fund with ability to extend ELA in Bosnia and Herzegovina
Staff suggest creating financial stability fund that can provide liquidity support to stressed but solvent banks, which the currency board arrangement prohibits the central bank from doing
Korea introduces RMB discount window
Bank of Korea to launch emergency liquidity facility offering Chinese currency as part of broader infrastructure push aimed at bolstering Seoul's role as RMB hub
Greek banks shut for a week as ECB freezes emergency fund
Banks closed and ATM withdrawals capped after the ECB's governing council freezes the supply of emergency liquidity; Greek government calls referendum on latest proposals for July 5
Philippines central bank to implement Basel III liquidity rules
Central bank governor Amando Tetangco says local banks ready for the new rules
BoE report details ‘innovative’ liquidity insurance tool
Indexed long-term repos were introduced as part of liquidity facility upgrades after the global financial crisis, and are designed to automatically adjust to stress
Exchange launches asset-backed coins for asset managers
Asset managers will be able to trade physical assets directly with each other through new asset class dubbed ABCs, which will be tradeable on newly launched exchange Abacas
Fed's Tarullo sees few signs of illiquidity in OTC markets
Fed governor says markets are in transition, while many actors are telling the Fed that it is harder to move large positions
WEF panel sets out plan to develop African capital markets
Rwanda governor says more domestic savings and deeper markets necessary for development; private sector participants praise integration in East Africa
Central bank liquidity surge is not without historical precedent
Major central banks have injected $14 trillion of liquidity into the global economic system, but such surges are not without historical precedent
RBA deputy governor shares lessons on collective investment vehicles
Philip Lowe discusses the risks associated with maturity transformation in the country’s growing asset management industry; says disruptions can be managed