Central Bank shows a promising picture despite losses in values

The Finance Stability Report by Turkey’s Central Bank, announced Monday, claims the profitability of Turkish banks will not continue to fall in the second half of the year, implying no further hikes in reserve requirements are on the way.

The financial stability report highlights the financial strength of the Turkish banking sector, in which some lenders posted loss in value and profitability during the first half of the year, due to the recent monetary policies of the Central Bank.

Cyprus Central Bank hosts round table debate on financial stability

The Central Bank of Cyprus will host a round table debate entitled “Towards Strengthening Financial Stability” on May 28, in the southern coastal town of Limassol.

A press release issued by the Central Bank said the public debate is organized in the framework of the annual meeting of Finance Ministers and Governors of the group of countries represented at the International Monetary Fund and the International Bank by the Netherlands. This meeting will be held in Cyprus on May 27-29.

Financial stability reforms are disastrously misconceived

Former monetary policy committee external member Professor Willem Buiter has hit out at the “misconceived” financial stability reforms, saying the Chancellor should have a key role in maintaining stability.

Under current plans, the Financial Policy Committee will be responsible for financial stability and will be chaired by the governor of he Bank of England.

Efama rejects concerns that ETF pose risks

Regulators’ concerns that exchange traded funds could present a potential threat to the stability of financial markets have been firmly rejected by Efama, the representative association for the European investment management industry.

In reply to a report criticising the ETF industry published in April by the Financial Stability Board, Efama said the existing Ucits regulatory framework governing ETFs in the European Union already contained “state of the art” risk management policies and procedures.

Buiter Says It’s a Mistake to Give BOE Bank Supervision Powers

Former Bank of England policy maker Willem Buiter said it’s a “mistake” to place full responsibility for financial stability with Governor Mervyn King, criticizing a government plan to overhaul banking regulation.

“The Bank of England is greatly overburdened and too powerful in this proposed construction, especially the governor and the two deputy governors,” Buiter said at a U.K. parliament hearing in London today. “The obvious solution is to remove prudential supervision from the bank.”

Bank’s ‘corporate governance’ under scrutiny

During the past two decades, the Bank of England has been transformed. While it still occupies a cavernous 18th century building in the City of London, designed by Sir John Soane, its functions and responsibilities are barely recognisable from those it discharged as recently as 15 years ago.

Brazil sets up financial stability board

The Brazilian central bank has created a Financial Stability Committee looking to monitor and coordinate responses to a build-up of systemic risk.

The committee will consist of the chairman and seven directors of the Central Bank, with each member having a single voting right.

Increased role for UK auditors under PRA

Auditors will have an increased role to play under the UK's Prudential Regulation Authority in a bid to boost the new watchdog's oversight of financial institutions.

The responsibility of third parties will be expanded under the PRA to improve the information the banking regulator will receive, as it aims to maintain system-wide financial stability.

EU, EFSF plan benchmarks totalling 15.3 bln euros

The European Union and the European Financial Stability Facility (EFSF) said on Thursday they had revised their debt issuance calendar to cover financial support for Portugal approved by EU finance ministers this week.

The EFSM and EFSF would go to the market between May 23 and July 15 to cover the first disbursements to Portugal and Ireland for a total of 15.3 billion euros ($21.8 billion), they said in a statement.

Regulators start review of global bank bonus curbs

Watchdogs plan to check up on big international banks directly to see if they have improved compliance with globally-agreed bonus curbs.

The Financial Stability Board (FSB) said in a statement its latest review will survey supervisors and regulators as well as "a sample of major firms directly."

The race to secure Tepco’s financial stability

The makeshift systems that Tokyo Electric Power has been using to stave off disaster at its crippled Fukushima Daiichi nuclear power plant are not pretty. At various times, the Japanese utility has tapped everything from riot trucks to a Chinese cement-pourer and a floating fishing park to pump cooling water into its overheating reactors and store the radioactive run-off.

Hedge funds are not ‘shadow banks’

We have been hearing a lot recently about the “shadow banking” sector. Senior bankers and lawmakers seem to have found a new bogeyman. The International Monetary Fund has called for enhanced oversight of “shadow banking activities”, while the G20 has instructed the Financial Stability Board to develop regulatory recommendations by the autumn.

Who will be covered by this new system of oversight? The term “shadow banking”, first coined in 2007, is usually meant to refer to a wide variety of non-bank financial institutions including money market funds, structured investment vehicles and insurance companies. The implication is that such organisations are engaging in bank-like activities out of the sight of regulators, creating unmonitored risks to the system.

Securing global economic security

Inflation is a significant factor of global economic security and has the innate capacity to upend carefully laid plans

Euro crisis solution lies in political arena

WORLD VIEW: The alternative visions of economists must focus better on what is possible internationally

IRELAND BADLY needs a strategy to handle the euro zone crisis, rather than reacting defensively to all its latest twists and turns. This requires a political as well as an economic understanding of the dynamics in play at European and national levels.

Framework For Cross-Border Financial Stability Needed, Says Zeti

KUALA LUMPUR, May 13 (Bernama) -- Bank Negara Malaysia is calling for action to develop a framework for cross-border financial stability as Islamic finance continues to expand beyond national boundaries, says Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz.

She said increasing internationalisation of Islamic finance has, to a significant extent, been facilitated by the expansion of Islamic financial institution operations beyond domestic borders.

More insurance bailouts possible: Reserve Bank

More insurance companies may require bailouts as a result of the Christchurch earthquakes the Reserve Bank said this morning, but it will likely be parent companies providing the cash rather than the Government.

At its twice yearly report on the health of New Zealand's financial system, the Reserve Bank this morning said the Christchurch earthquake had presented fresh challenges and increased domestic risks just as international markets were showing signs of improvement.

Bank of England official calls for action against City 'myopia'

Andrew Haldane at the Bank of England said the City's short-term bias held back important investment – and could be getting worse

A senior Bank of England official today called for government action to stem the rise of short-termist investment decisions taken in the City.

Greece May Want Bailout Fund to Buy Its Debt

Greek Finance Minister George Papaconstantinou said Saturday that Greece was exploring the possibility of having a European bailout fund buy its debt if the government is unable to access capital markets again next year.

"The markets continue to disbelieve in our country," Mr. Papaconstantinou told reporters. "We have to plan our next steps for 2012, for 2013."

U.S. Bank Leverages Unique Expertise to Improve Financial Stability

Today, United Way honored U.S. Bank with the 2011 Spirit of America® Award to recognize the company and its employees' commitment to improving the financial stability of individuals, families and local communities. Microsoft Corporation, Bank of America, Procter & Gambleand Dominion Resources, Inc.also received Summit awards for generosity, volunteerism and measurable community impact.

Asian Financial Stability Board to launch as early as May

An Asian version of the Financial Stability Board will be launched as early as this month, with Korea likely to assume the co-chairmanship of the organization to comprise major Asian countries including Korea, China and Japan.

The launch of the board will add further momentum to regional financial integration recently been pursued by Asian countries.

FSB must slow down on insurer Sifis

Think tank the Geneva Association has warned the Financial Stability Board to slow down its review of firms posing systemic risks to the financial system so that insurers do not face unfair requirements.

In a presentation in Kansas on Thursday, the think tank argues that the urgency of the FSB to complete a methodology judging which firms are systemically important could mean that insurers who pose a risk to the financial system may end up being overlooked.

Bernanke: Fed Moving to Promote Stability

By Michael S. Derby

The Federal Reserve is still working out how much information to disclose in future banking sector stress tests, central bank c said Thursday.

“We are not ready to issue proposed rules on that,” Bernanke said, but the Dodd-Frank financial oversight reforms specify “the Fed will release broad information from those stress tests.”

ADB asks members to focus on financial stability

Manila-based Asian Development Bank (ADB) has urged member governments to stay focused on building resilient financial systems.

ADB president Haruhiko Kuroda, in a statement released Wednesday, said much progress has been made in enhancing financial stability at national, regional and global levels. He added that much still needs to be done.