The Financial Regulation Forum

Latest Post

BoE Quarterly Bulletin

Bank of England Quarterly Bulletin 2013 Q2. ​Contents of Quarterly Bulletin 2013 Q2 Each article is available as a separate pdf file;  click on the appropriate title to access the relevant file.  Alternatively you may download the complete issue. Complete issue (3.17MB) Topical articles Research work published by the Bank is intended to contribute to [...]

Featured Posts

Complexity of financial regulation

The dog and the frisbee. In a paper given at the Federal Reserve Bank of Kansas City’s 36th economic policy symposium in Jackson Hole, Wyoming, Andrew Haldane – Executive Director for Financial Stability and member of the Financial Policy Committee – explores why the type of complex financial regulation developed over recent decades may be [...]

Bernanke college lecture series

In March 2012, Chairman Ben S. Bernanke delivered a four-part lecture series about the Federal Reserve and the financial crisis that emerged in 2007. The series began with a lecture on the origins and missions of central banks, followed by a lecture that discussed the role and actions of the Federal Reserve in the period [...]

E-learning interactive graphic: Basel III

International regulatory framework for banks (Basel III). What is Basel III? Around the world, central bankers, regulators and governments have responded to the financial crisis with new regulation and legislation. The cornerstone of this global initiative to contain risk is Basel III – sweeping new regulatory standards for banks on capital adequacy and liquidity. Basel [...]

Snippets

• 10 Jun. Quarterly Bulletin pre-release article: ‘Central counterparties – what are they, why do they matter and how does the Bank supervise them?’ Financial market infrastructures lie at the heart of the financial system. They settle transactions and, by stepping in between buyers and sellers, ensure that financial obligations are met. As such, they play a crucial role in helping the economy and financial markets to function. Central counterparties (CCPs) – also known as clearing houses – are one type of financial market infrastructure. Central counterparties: what are they, why do they matter and how does the Bank supervise them? sets out in simple terms the important role that CCPs play in the financial system. (more...) #
• 07 Jun. Challenges of prudential regulation. Speech given by Andrew Bailey, Deputy Governor, Prudential Regulation and Chief Executive Office, Prudential Regulation Authority, At the Society of Business Economists Annual Dinner, June 2013. Thank you for inviting me this evening – it is a great pleasure to have this opportunity and particularly at a time when we are embarking on major reforms to policymaking in the area of financial regulation. The financial crisis has provided hard lessons on what happens when the stability of the financial system is found wanting. It has reminded us how much we depend upon the supply of critical services from banks, insurers, investment firms, asset managers and other parts of the financial sector. If you take the banks as Exhibit One, there is good reason to curse them, but at the same time recent experiences have only served to emphasise how much we depend upon them, like it or not. The new legislation on financial regulation in the UK emphasises the importance of the continuity of supply of critical financial services. This is a permanent public policy objective, and rightly so. I use the term “permanent” deliberately to distinguish this objective from the support provided by Too Big / Important to Fail, which should not be permanent. (more...) #
• 24 May. Prudential Regulation Authority statement on bank capital. ​The Prudential Regulation Authority (PRA) is taking forward with the major UK banks the adjustments to capital positions identified by the Financial Policy Committee (FPC) relating to expected future losses, conduct costs and prudent risk-weighting. The PRA has set out the capital requirements for Lloyds Banking Group and Royal Bank of Scotland. The two banks have advanced their plans to a position where disclosure is appropriate. (more...) #
• May 21. The City as Savior of E.U. Finance. By HUGO DIXON | REUTERS  It is perhaps too much to expect the Conservative-led government in Britain to lead any initiatives on Europe, given the orgy of self-destruction in the party over whether Britain should stay in the European Union .  But insofar as David Cameron manages to get some respite from the madness, he should introduce a strategy to enhance the City of London as Europe’s financial center. Britain has in recent years been playing a defensive game in response to the barrage of misguided financial rules from Brussels. It now needs to get on its front foot and sell the City as part of the solution to Europe’s problems. The opportunity is huge both for Britain and the rest of Europe. (more...) #
• 17 May. The euro zone’s financial set-up doesn’t look very democratic. Almost six years have elapsed since the start of the financial crisis. Yet the tensions between economic (and financial) efficiency and democratic accountability are still unresolved. These tensions first appeared in the autumn of 2008 when the plan to bail out American banks via the TARP (Troubled Asset Relief Programme) caused a visceral public reaction, prompting Congress initially to reject the bill. Although the plan limited the severity of the recession, opponents still attack those congressmen who eventually supported the bill for being in hock to Wall Street. (more...) #
• 17 May. Keeping one step ahead of the cyber criminals. One of the biggest issues facing companies globally is security - not of their physical assets, but of their computer networks and data centres. Hacking has been "industrialised", says security expert Tom McDonough, with criminals even selling hacking kits - with a promise of refunds if they do not work. So how do you protect yourself against cyber attacks? Mr McDonough, president of Nasdaq-listed Sourcefire, a cyber security intelligence company, shares his thoughts. (more...) #
• 14 May. Regional Economic Outlook: Sub-Saharan Africa. Building Momentum in a Multi-Speed World. May 2013 Growth remained strong in the region in 2012, with regional GDP rates increasing in most countries (excluding Nigeria and South Africa). Projections point to a moderate, broad-based acceleration in growth to around 5½ percent in 2013¬14, reflecting a gradually strengthening global economy and robust domestic demand. Investment in export-oriented sectors remains an important economic driver, and an agriculture rebound in drought-affected areas will also help growth. Uncertainties in the global economy are the main risk to the region’s outlook, but plausible adverse shocks would likely not have a large effect on the region’s overall performance. (more...) #
• 14 May. The jury’s out on whether Dodd-Frank will save capitalism. By Robert J. Samuelson. It’s been five years since the onset of the financial crisis — the rescue of Bear Stearns in March 2008 — and we still don’t know whether the financial system is safe. In a recent speech, Daniel Tarullo, the Federal Reserve’s point man on regulation, contended that substantial, though incomplete, progress has been made. As an example, he cited the doubling of equity capital for the 18 largest bank holding companies from $393 billion in late 2008 to $792 billion at the end of 2012. Equity capital is shareholders’ money; it acts as a buffer against losses. Interestingly, JPMorgan Chase’s well-publicized $6 billion loss by the trader nicknamed the “London Whale” confirms the point. Despite the loss’s size, it never threatened a panic or overall financial stability. (more...) #
• May 13. Bank rules ‘restrict Africa growth. By Ann Crotty. Global banking rules such as Basel 3 were making it difficult for banks in Africa to provide services to the public and were consequently restricting the continent’s potential to develop, delegates attending the World Economic Forum on Africa were told last week. V Shankar, the group executive director and chief executive of Europe, Middle East, Africa and the Americas at Standard Chartered, said that Africa had huge potential and was “hot on people’s agenda”. (more...) #
• May 13. New regulation poses a threat to investment banks, and more is on the way. “THE MOOD AMONG investment banks that I talk to…is such that they expect that the regulation is over, they expect that they will be able to keep growing their balance-sheets, that they will be growing bigger than ever,” says Axel Weber, chairman of UBS, Switzerland’s biggest bank. As a former president of Germany’s central bank, he is well placed to take the temperature of both bankers and their overseers. “The mood among the regulators I talk with is more like ‘we haven’t even started’.” (more...) #
• May 12. Can We End Too Big to Fail? Presented by Charles I. Plosser, President and Chief Executive Officer, Federal Reserve Bank of Philadelphia.. 4th Annual Simon New York City Conference. Reform at a Crossroads: Economic Transformation in the Year Ahead. Introduction It has been nearly three years since the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which called for significant reforms of financial system regulation and supervision. As regulators continue to write thousands of pages of rules to implement the various provisions of the act, it seems like a good time to ask if we are adequately addressing the issues in most urgent need of reform. Today, I want to focus on one of the most significant issues: too big to fail. (more...) #
• 08 May. Libor scandal: Can we ever trust bankers again? As Britain awaits a major report by the Parliamentary Commission on Banking Standards, the BBC's Business Production team, in partnership with the Open University, asks what went wrong with the system and can we ever trust bankers again? About £132bn of British taxpayers' money has been spent bailing out the banks since the credit crunch in 2008 turned into an economic crisis. But the crisis has exposed deeper problems with the banking industry. (more...) #
• 08 May. Banish the threat from Europe’s zombie banks. The financial sector needs credible stress tests, say Harald Benink and Harry Huizinga. Unlike the US, Europe failed to recapitalise its biggest banks following the financial crisis of 2007-09. Instead, policy makers gambled that economic recovery would lift the profitability of financial institutions, enabling them to increase their capital buffers over time. It is now clear that this strategy has failed. The eurozone is in a new recession and the depressed share prices of many banks signal that they are in dismal health. (more...) #
• 07 May. The euro and the ECB: Perspectives and challenges ahead. Keynote address by Yves Mersch, Member of the Executive Board of the ECB, Journée Boursière, Luxembourg, 6 May 2013. Ladies and Gentlemen, dear friends and guests, It was fifteen years ago, in May 1998, that the first Executive Board of the European Central Bank was constituted and commenced its work in Frankfurt.This anniversary is passing almost unnoticed. Some may say this is not a good moment for cheerful celebration. Indeed we have little room to pause as we are confronting new challenges every day. Nonetheless, I would like to take a step back and start off my remarks with a tribute to the founding fathers – and founding mother – on the Executive Board of the ECB. They have set us on the right course. The ECB, for its part, has delivered on what it has been asked to do. The same cannot be said for other policy areas. Partly because of its success in establishing itself as a credible institution, the ECB has been in a position to step into the breach during the crisis as a guarantor of stability and is now being asked to shoulder additional responsibilities. As back then, when the first Board prepared for the launch of the euro, today the ECB is steering a course into uncharted territory. As it was back then, today we need to be guided by firm principles and a clear compass to serve as an anchor of stability. (more...) #
• 13 Nov. China’s Banking Leaders Seek to Calm Concerns Over Loan Quality. China ’s top banking regulators and the chairmen of the four largest banks tried to allay concerns on Sunday that the country was allowing its banking system to grow at a reckless pace as a way to sustain short-term economic growth. The regulators and bank chairmen said during a rare joint news conference that they were managing the industry prudently and that effective measures had been taken to limit risk even as lending expands briskly. “The risks are within control,” Shang Fulin, the chairman of the China Banking Regulatory Commission, said on two separate occasions. (more...) #