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’A counter-cyclical Basel banking proposal
This looked bracing from the Basel Committee for Banking Supervision on Friday: proposals for a counter-cyclical capital buffer for banks.
But there’s a bit less than meets the eye.
Here’s some Basel jargon introducing the buffer,
It’s the BIS
One reason the BIS gold-swap story has courted some controversy is because, on the face of it, the Bank of International Settlements — being the central bankers’ central bank– is not supposed to lend to commercial banks.
Who’s the bank with the golden swap?
UBS precious metals analyst Edel Tully takes a stab at making sense of the mysterious BIS gold swap, revealed in headlines on Wednesday.
In particular, she attempts to determine which institution could possibly be behind it.
Some BIStoric gold swaps
Whether the Bank for International Settlements can, or wants to, sell its 346 tonnes of newly-acquired central bank gold is a matter of some debate.
But one thing everyone seems agreed on is that, as the FT notes,
346 tonnes of gold at the BIS …
… 346 tonnes of gold at the BIS, 346 tonnes,
You take one down, sell it around, 345 tonnes of gold at the BIS!
This little footnote — from BIS’s latest annual report — is currently making waves in gold markets:
Those low interest rate U-Zirpers at the BIS
In the battle between Austerians and Stimulants, the Bank for International Settlements (BIS) knows where it stands. In its latest annual report the central banks’ bank takes aim at everything from delayed fiscal adjustments to the extended period of low interest rates in places like the UK and US.
BIStoric
The Bank for International Settlements — the central banks’ bank — has done something great.
BIS has scanned and stuck all its historic annual reports online, in one easy-to-access place. The reports,
Back to the future, by BIS
Lehman-Greece parallels we are familiar with.
But in the latest edition of the BIS Quarterly Review, the Bank for International Settlements argues that the current eurozone debt crisis has more in common with the slow-burn start of subprime than a sudden Lehman-esque collapse.
Who’s exposed to Hungary (II)
Hungary, look what you’ve kicked off.
JP Morgan published its analysis of which major European banks are exposed to the eastern European nation earlier this Tuesday. And BNP Paribas’ Ivan Zubo and Olivia Frieser have just followed suit with a rundown of country-by-country exposure to Hungary.
The pictorial, speculative, yen carry trade
Academics have been busy figuring out ways to plug the gaps in pre-crisis financial data.
In a BIS working paper, Stephen Cecchetti, Ingo Fender and Patrick McGuire identify and analyse two data sets that they think were lacking in the run-up to the financial crisis.
Should CDS markets be more skeptical about European banks?
Moody’s Market Implied Ratings group — not the be confused with the ratings division — last week published some research into the reaction (or lack thereof) of the CDS investors to European banks’ “likely exposures to Greek obligations.”
[mak-roh][proo-den-shuhl]
First find the buzzword. Then find the meaning.
From the Bank of International Settlements: nine pages on the origins and meaning of the term “macro-prudential.” Number of times the term has already appeared on the BIS website:
Would you like a massage for your stressed VaR?
The BIS has released its analysis of proposed changes, adopted in July, to Basel II capital rules.
It’s basically an exercise in seeing just how much more capital banks will have to hold under the rejigged rules,
SPE oops
Buried in the BIS Joint Forum’s 115-page epic on Special Purpose Vehicles are some interesting factoids on just who did not understand the complex financial structures they were investing in. It turns out,
BIS regulator urges caution
The head of the body that oversees global banking regulation warned at the weekend that the world cannot afford to slip into a “complacent” assumption that the financial sector has rebounded. Speaking ahead of this week’s G20 summit in Pittsburgh Jaime Caruana,
Let them eat equity tranches
A curious proposal for securitisation reform has appeared in BIS’s latest quarterly review.
The argument, so it goes, is that securitisation didn’t do so well in the recent financial crisis — structured financial products weren’t immune (or even that well protected) from losses in underlying collateral.
The dollar shortage problem, evaluated
When central banks around the world initiated unlimited and multiple swap lines at the peak of the financial crisis last year, the mainstream press gave the event little, if any, coverage.
The jargon,
Bailout CDS vs bailout stocks
From a recently-released BIS paper assessing the impact and ‘success’ of financial rescue programmes:
Those are changes in bank CDS after various government support programmes (in basis points) and changes in stock prices (percentage points).
Stress-testing, a retrospective view
While the recent stress-testing of banks by the US government garnered a lot of attention, there has been much less focus on the stress-testing procedures of banks in the run-up to the crisis. Or rather,
That EM lending retraction, graphic edition
Standard Chartered notes just how sharply banks pulled lending from emerging markets in Q4 2008:
Related link:
External debt shrinkage – FT Alphaville
External debt shrinkage
Some interesting trends are emerging in the land of external debt figures. The latest international banking statistics from the BIS released Wednesday showed banks’ external claims shrank by 5.1 per cent in the fourth quarter of 2008 to $31,000bn.
Banks cut overseas lending: BIS
Banks retreated from foreign lending at the fastest rate since records began 30 years ago in the final quarter of last year, the Bank for International Settlements said Wednesday. The BIS report is the first comprehensive picture of the scramble to repatriate funds and reduce leverage amid the financial chaos of late 2008.
The Eastern European carry-trade meltdown, reviewed
As reported here previously, much of the panic surrounding western European exposure to CEE fragility was focused on a particular set of BIS figures, a number amounting to some $1,700bn ‘reflecting total foreign claims’ from the region.
BIS warns of collapse in global lending
Global lending has fallen at the steepest rate since records began this year, with cross-border loans worldwide plunging by $1.1 trillion in the first half, reflecting the scramble by the financial industry to cut leverage by pulling credit lines and slashing risky exposure,
The crisis, according to BIS
The latest quarterly review from the Bank for International Settlements (BIS) is out today and makes for essential reading. First, it is an excellent summary of the last quarter’s events and second, for a banking document,
Credit crunch snap
“… a shuddering $4.2 trillion reversal of flows.”
From Diapason Commodities, via the BIS Q2 preliminary banking stats.
BIS: Banks shift US funds to Europe
Banks transferred funds out of the US and into Europe in the first quarter of 2008 as they turned to safer assets amid the global credit crunch, the Bank for International Settlements said in its latest quarterly review of financial markets and banking activity,
BIS research throws light on Libor
A dramatic imbalance between the funding patterns of US and European banks might be fuelling continued tensions in money markets, according to research by the Bank for International Settlements. European banks have secretly increased their dependence on dollar funding by about $500bn in the last four years to some $800bn by mid-2007 before the credit crisis.
BIS warns banks on hedge funds
The Bank for International Settlements will warn on Monday that investment banks have become less disciplined in their dealings with hedge funds and that regulators may need to press both the banks and hedge funds to reveal more data about their market activities and step up their level of stress-testing in areas such as derivatives.
Carry trades lift fund returns
Hedge fund returns have in part been driven by pay-offs from carry trades in recent years, according to the Bank for International Settlements. According to BIS research, to be published on Wednesday in its quarterly review,