By Paul De Grauwe, Yuemei Ji Since central banks started their fight against inflation, they have transferred massive amounts of their profits to banks. The authors of this column have suggested that minimum reserve requirements are a valid alternative, but they have met fierce resistance because they are seen as introducing distortions and departures from[…]
Published as part of the Financial Stability Review. Changes in the cost and the composition of bank deposits have important implications for banks’ net interest income. This, in turn, affects their retained earnings, capital position, overall resilience and hence their ability to provide credit to the real economy. The ultimate impact of higher policy rates[…]
By Claudia Buch, Linda S. Goldberg, Björn Imbierowicz Recent geopolitical events have raised concerns that markets for goods and services could become more fragmented. Clearly, trade uncertainty has increased. The consequences for financial intermediation of fragmentation and uncertainty are not well understood though. If banks affected by adverse trade events contract lending, the effects of[…]
By Aymo Brunetti The subsidised emergency takeover of Credit Suisse by UBS brings the current global ‘too big to fail’ regime into question. This column argues that an in-depth analysis of the global resolution framework by both regulators and academics is needed. The main question is whether a resolution of a global systemically important bank[…]
This report summarizes the Federal Reserve Board’s framework for assessing the resilience of the U.S. financial system and presents the Board’s current assessment. By publishing this report, the Board intends to promote public understanding and increase transparency and accountability for the Federal Reserve’s views on this topic. Link: Financial Stability Report
Key takeaways Link: Statistical release: BIS international banking statistics and global liquidity indicators at end-December 2022
Banks’ ability to temporarily contract their balance sheets around reporting dates to report more favourable regulatory metrics – a regulatory arbitrage practice commonly referred to as window dressing – poses a risk to financial stability. In this paper, we investigate both the magnitude and the drivers of bank window dressing behaviour in euro-denominated repo markets.[…]
The European Central Bank (ECB) and the Single Resolution Board (SRB) welcome the European Commission’s proposed legislative changes to the European bank crisis management and deposit insurance framework. Link: ECB and SRB welcome European Commission’s legislative proposals for bank crisis management and deposit insurance framework
The European Commission has today adopted a proposal to adjust and further strengthen the EU’s existing bank crisis management and deposit insurance (CMDI) framework, with a focus on medium-sized and smaller banks. Link: Banking Union: Commission proposes reform of bank crisis management and deposit insurance framework
By Gaston Gelos, Maria Soledad Martinez Peria, Erlend Nier, Fabian Valencia While many emerging economies have been using macroprudential policy tools for some time, their use to safeguard financial stability was only embraced more widely in response to the global financial crisis. This column takes stock of what we have learned about macroprudential policy, and[…]