systemic risk

News and Notes – Fintech

Bank of Finland, neural networks, systemic risk

Researchers from the Bank of Finland consider predicting systemic financial crises one to five years ahead using recurrent neural networks. The prediction performance is evaluated with the Jorda-Schularick-Taylor dataset, which…

ECB paper: ban on trading naked sovereign CDS in 2012 had greatest impact on systemic risk reduction for sovereigns

March 26, 2019

Europe, European Systemic Risk Board, systemic risk

Effectiveness of policy and regulation in European sovereign credit risk markets: a network analysis Rebekka Buse Melanie Schienle Jörg Urban European Systemic Risk Board Working Paper Series No 90 March…

ESMA updates for fin-, reg- and suptech on trends, risks and vulnerabilites

March 7, 2019

News and Notes – Fintech

ESMA, fintech, Market Risk, regtech, suptech, systemic risk

Fintech continues to drive innovation in financial services, with potentially far-reaching consequences for both end-users and service providers, said ESMA in a recent report. Crypto Assets (CAs) and Initial Coin…

BIS: Clearing risks in OTC derivatives markets: the CCP-bank nexus

December 17, 2018

BIS, CCPs, systemic risk

Systemically important banks and central counterparties (CCPs) interact in highly concentrated over-the-counter (OTC) derivatives markets. We outline the CCP-bank nexus to think about the endogenous interactions between banks and CCPs…

BoE Systemic Risk Survey 2018 H2: 67% expect a high-impact risk event in the short term

November 28, 2018

Bank of England, systemic risk

Probability of a high‑impact event and confidence in the UK financial system The perceived probability of a high‑impact event in the UK financial system over the short term has increased…

FSB says “surprises” could spur tightening of financial conditions

June 26, 2018

FSB, G20, systemic risk

In an FSB plenary discussion on risks and vulnerabilities to the global financial system, a major concern identified a broad-based snap-back in long-term interest rates as a risk. After a…

BIS report assesses structural change in global banking

January 25, 2018

Bank profitability has fallen from pre-crisis peaks but banks have become more resilient to risks, finds a new report by the Committee on the Global Financial System (CGFS). Over the…

The Minneapolis Fed wants a 15% Leverage Ratio and a 1.2% tax on secured financing. That’s one way to reduce risk…

January 16, 2018

Basel III, Regulatory, Shadow Banking, US

Federal Reserve Bank of Minneapolis, Leverage Ratio, Minneapolis Fed, Shadow Banking, systemic risk, TBTF, too big to fail, topstory

The Federal Reserve Bank of Minneapolis has released a plan to end Too Big to Fail (TBTF) on a comprehensive basis. The choice is again between strengthening bank balance sheets…

OFR: intersection of US money market reforms, bank liquidity requirements, and the FHLBank system

November 1, 2017

News and Notes, Uncategorized

FHLBank, money market mutual funds, OFR, systemic risk

After the financial crisis, reforms of money market funds and changes to banks’ liquidity requirements had an unintended consequence of increased Federal Home Loan Banks’ reliance on short-term funding from…

Wanted: risk returns for capital markets

July 20, 2017

Dodd-Frank, Federal Reserve, Interest rates, Regulatory, Systemic Risk

bank regulation, Central Banks, systemic risk, topstory

Central banks are starting to signal exits from traditional and non-traditional stimulus responses to the Great Recession. The US and Canada have both turned the corner on interest rates, and…

Get ahead on key issues with Finadium research: an example from the BIS Annual Report

July 12, 2017

Bank for International Settlements, Funding/Liquidity, systemic risk, topstory

Cash management, Collateral Management, ECB, Europe, Liquidity Management, Market infrastructure, Money Market Funds, Pro-cyclicality, Regulatory, Repo, Risk Management, Systemic Risk

The Bank for International Settlements (BIS) released their 87th annual report on June 25th including an important section on risks in the US dollar funding market. The section outlines concerns…

Cyber security is a tangled web that demands smart ways of looking at the problem

July 5, 2017

Fintech, Market infrastructure, Operations, Systemic Risk, Technology

cyber risk, cyber security, fintech, systemic risk, topstory

Here’s the plot line. “By the time you read this, it may have already happened. There will be a major assault on the plugged-in world’s most critical survival infrastructure, and…

The BIS repo paper: one step forward but mostly an example of frustrating regulatory thinking

April 18, 2017

Basel III, Repo, Systemic Risk

BIS, CGFS, Committee on the Global Financial System, Repo, systemic risk, topstory

We read last week’s “Repo Market Functioning,” the paper from the Bank for International Settlements’ Committee on the Global on the Financial System, with interest and frustration. There is good…

Under bank capital rules a reduction in US Federal deficit would spell serious trouble

October 17, 2016

Collateral Management, Dodd-Frank, Federal Reserve, Liquidity Management, Market infrastructure, Money Market Funds, Regulatory, Repo, Systemic Risk, US

Federal deficit, Federal Reserve, Liquidity, systemic risk, topstory, US Treasuries

The US Federal deficit has been an absent topic in recent Presidential debates and skirmishes. Certainly it is less enticing to the general populace than the latest scandals and accusations.…

Should CCP default reserves be funded by debt or securitization?

August 17, 2016

Basel III, CCP, cover 2, Credit Exposure, Derivatives, Dodd-Frank, Europe, IOSCO, Market infrastructure, OTC Derivatives Clearing, Regulatory, Risk Management

CCP, Central Counterparties, counterparty risk, systemic risk, topstory

Default reserve funding at CCPs remains an on-going topic of interest in collateralized funding and other centrally cleared markets. In recent years, regulators and others interested in the systemic risks…

Bank of England: Systemic risk in derivatives markets: a pilot study using CDS data

July 9, 2016

Bank of England, non-cleared derivatives, systemic risk

Financial Stability Paper 38: Systemic risk in derivatives markets: a pilot study using CDS data – Robleh Ali, Nick Vause and Filip Zikes 08 July 2016 Systemic risk in derivatives…

Fed researchers publish "bailout barometer"

May 23, 2016

Basel III, Dodd-Frank, Federal Reserve, Regulatory, Risk Management, Systemic Risk, US

bailouts, Federal Reserve, Regulation, systemic risk, topstory

The Richmond Fed recently published a report on the extent of potential government bailout exposure in the event of another major financial crisis. The estimate shows that the US government…

Finadium report: ETF Risk in the New Regulatory Environment

February 8, 2016

Collateral Management, Derivatives, Regulatory, Securities Lending

collateral management, derivatives, ETFs, Finadium, Liquidity, Securities Lending, systemic risk, topstory, volatility

A new Finadium report looks at liquidity and operational risk in the ETF market given recent changes in underlying market liquidity and volatility, as well as regulatory concerns about fire-sale…

FT: Clearing house push created unforeseen systemic risks

February 1, 2016

CCPs, Financial Times, systemic risk

US officialdom is admitting that it needs to give some thought to what could possibly go wrong with the clockwork of the securities and derivatives clearing houses, or CCPs, that…

Fed Governor Tarullo speaks on regulating insurers liability sensitive activities, including sec lending, repo, and collateral management

September 30, 2015

Jonathan Cooper

Basel III, Collateral Management, Derivatives, Dodd-Frank, Financial Stability Board, Regulatory, Repo, SEC, Securities Lending, Uncategorized

Daniel K. Tarullo, Federal Reserve, insurance regulation, market externalities, systemic risk, TBTF, topstory

The theme this week has been regulators looking beyond the banks for risks to to the financial system. We saw the SEC take aim at mutual funds and ETFs with…

A European regional perspective on market reform and growth

September 14, 2015

Michael Cyrus

ECB, Europe, Investments

Deka, DekaBank, ECB, Europe, Regulation, systemic risk, topstory

In 2008, a global de-regulation super trend came to a grinding halt and gave rise to an era of financial repression. However, while financial innovation and financial repression are global…

The IMF on non-leveraged asset manager risk: for heaven’s sake, where can people safely invest?

April 13, 2015

Investments, Liquidity Management, Risk Management, Systemic Risk

asset managers, Global Financial Stability Report., IMF, Liquidity, systemic risk, topstory