Systemic risk
‘Fallen angels’ pose little threat to EU funds
Passive fund outflows in a credit crisis would put pressure on high-yield bond prices
EU insurers increase derivatives holdings
Greater interest rate swap values push up interconnectedness risk of insurance sector
Supervisory stress testing for central counterparties: a macroprudential, two-tier approach
This paper examines the role of supervisory stress testing of central counterparties (CCPs). A key message is that the design of supervisory stress tests (SSTs) should be tailored to CCPs’ roles, risk profiles and financial structures.
UK firms lead in cross-border loans to shadow banks
Entities based in the UK had 20% of outstanding global loans to non-banks
Credit assets of non-banks top $44trn
Hedge funds increase loan and bond holdings the most of shadow-banking entities
Ties between banks and non-banks at pre-crisis levels – FSB
Other financial intermediaries grow share of total financial assets to 30.5% in 2017
Growth of shadow banks slowed in 2018 – FSB
Funds susceptible to run risk make up 72% of narrowly-defined non-bank universe
When a lapse in concentration is no bad thing
Fortifying too-big-to-fail firms to withstand future crises could make the entire system more vulnerable
Loosening ties, pt 2: how US G-Sibs cut intra-system liabilities
Citi and Goldman expelled huge amounts of deposits in Q4 2017
How US G-Sibs shrink down at year-end
Derivatives exposure reductions make up bulk of year-end savings
Loosening ties, pt 1: how US G-Sibs cut intra-system assets
Goldman Sachs reduced links with other financial firms the most in Q4 2018
G-Sibs in US grow leverage exposures faster than EU rivals
HSBC saw exposures fall 2.81% in Q3
EU gives one-year margin reprieve on equity options
Regulators point to possible systemic risk in margin loophole, as industry urges parity with US
Clearing experts fear tough EC stance on Emir 2.2
Industry disappointed final Esma advice did little to dial back on burdensome equivalence rules
Fifth Chinese bank nears G-Sib designation
Build-up of trading assets and hard-to-value instruments contributed to Bank of Communication’s G-Sib score increase
Threats posed by systemic banks vary by region
Eurozone and UK G-Sibs are too big to fail because of their cross-border activities, Chinese G-Sibs because of their size
Substitutability cap spares JP Morgan higher Basel G-Sib score
JP Morgan could be in higher G-Sib bucket with cap removed
At US G-Sibs, 30-day funding still in vogue
Short-term funding is secured by higher-quality collateral than two years ago
Top banks’ trading books dwindled in 2018
Trading and available-for-sale assets dropped €160 billion year-on-year
Four US banks on cusp of higher systemic risk charges
JP Morgan on track for a 4% systemic risk add-on
Now less of a systemic risk, Deutsche wins capital relief
Prospective leverage ratio should fall to 3.75% after risk-cutting efforts
TD Bank added to too-big-to-fail list
The bank’s total exposures climbed 2.4% to €931 billion year-on-year
EBA’s Campa: reduce Pillar 2 charges to offset output floor
Bankers plead for smaller capital hit and more predictability on implementation of Basel III
Banks feel chill of exposure from Fed’s SCCL
US rules on counterparty credit limit pose challenges for risk and regulatory teams despite proposed delay, says expert