LiquidityRSS

Central banks take co-ordinated action to increase liquidity

Six central banks announced coordinated action on March 19 to increase dollar liquidity in the wake of turmoil in global banking markets.

Events at SVB are a stark reminder of risk management fundamentals

Banks should take the opportunity to learn from the collapse of Silicon Valley Bank (SVB), not least the need to ensure their treasury and risk management practices are up to scratch.

Jo Burnham

Regulators move to stop energy shock becoming a financial crisis

Financial regulators in Europe are buttressing banks to contain strains in the energy market and to stop them morphing into a full-blown financial crisis.

GET time-bomb

UK pensions ‘time-bomb’ sounds global financial stability warning

Severe volatility in the UK’s government bond (gilts) market triggered by the unravelling of a pension fund investment strategy is a clear warning sign of other dangers lurking in a leveraged financial system.

Ulrich Bindseil

Banks fear digital euro becoming a ‘liquidity vampire’

The ECB is investigating launching a digital euro to future-proof the single currency and to defend its sovereignty. But creating a new form of money that is poorly calibrated poses substantial risks to the liquidity of deposit-takers.

fed

‘Lenders of last resort’ need to incentivise firms to hold more liquidity

Expanding the lender of last resort function to tackle financial distress is likely to work better when financial firms are incentivised to manage their liquidity risks in a socially responsible way.

Fed’s Brainard calls for lessons to be learned from Covid-shock

The market turmoil caused by measures to contain the spread of the Covid-19 pandemic, which necessitated massive public sector emergency support, underscores the need to make sure the financial sector can withstand a wide range of shocks, a Fed official has said.

Bank of England

Bank of England speech revives UK negative interest rate speculation

A speech from a Bank of England official has rekindled speculation that the central bank might be seriously considering cutting the UK base rate, currently at 0.1%, into negative territory saying this could provide a significant economic stimulus. 

FSB calls on G20 to address shadow bank risks following March volatility

Following market turmoil in March, the Financial Stability Board (FSB) has called for vulnerabilities in non-bank financial intermediation (NBFI) to be addressed. 

ESMA instructs exposed funds to prepare for future shocks

Investment funds with significant exposures to corporate debt and real estate assets have been told by the European Securities and Markets Authority (ESMA) to anticipate potential future adverse liquidity and valuation shocks.