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Financial Stability

All articles tagged with #financial stability

Barr Warns Against Shrinking the Fed's Balance Sheet, Calls for Integrated Central Banking
economy11 days ago

Barr Warns Against Shrinking the Fed's Balance Sheet, Calls for Integrated Central Banking

Barr argues the Fed's footprint isn’t the balance sheet size but its broader roles in banking safety, payments, and stability. Shrinking reserves or the balance sheet could weaken bank resilience and market functioning. He defends ample reserves as costless and essential, critiques proposals for reduced liquidity or more frequent lending, and urges an integrated, stable approach to monetary policy and financial regulation rather than trimming the balance sheet.

via Federal Reserve (.gov)|
#balance-sheet#economy#financial-stability
Central banks warn US-stablecoins could deepen dollarisation in emerging markets
global-economy1 month ago

Central banks warn US-stablecoins could deepen dollarisation in emerging markets

Senior central bankers warn that the rapid rise of USD-denominated stablecoins used in international payments could accelerate dollarisation in emerging markets, threaten monetary sovereignty, and facilitate illicit activity and capital-control evasion; while some officials see faster, cheaper cross-border payments as a benefit, regulators are racing to craft rules and a BIS-led effort to tokenize deposits aims to counter the threat; EM holdings of dollar stablecoins could reach about $1.22tn by 2028, up from roughly $173bn today.

via Financial Times|
#dollarisation#emerging-markets#financial-stability
Solvency, Not Runs, Drives Most Bank Failures
economics1 month ago

Solvency, Not Runs, Drives Most Bank Failures

A long-run study across 160 years of U.S. banking shows insolvency is usually the root cause of bank failures, with runs acting mainly as triggers for already insolvent banks. Deposit insurance reduced runs but did not eliminate failures, so policy should emphasize higher bank capital, stronger supervision, and selective liquidity support to panicking banks. Strong banks survive runs via interbank lending, signalings of confidence, and temporary suspension of convertibility. In short, mitigating solvency problems and recapitalizing when needed are key to preventing costly crises.

via Liberty Street Economics|
#bank-capital#bank-failures#economics
IMF: Private credit won’t spark a 2008-style crisis, but risk remains
economy-and-politics1 month ago

IMF: Private credit won’t spark a 2008-style crisis, but risk remains

IMF official Tobias Adrian says private credit is a key vulnerability but incentives today are better aligned and exposure to private debt is smaller for insurers and pension funds; he argues the private-credit boom isn’t expected to trigger a 2008-style financial crisis, though the IMF warns that a prolonged Middle East war could raise systemic risks and nonbanks could be forced to sell assets, so vigilance remains.

via MarketWatch|
#economy-and-politics#financial-crisis#financial-stability
IMF Chief Warns Mythos AI Could Spark Global Cyber Threats to Finance
business1 month ago

IMF Chief Warns Mythos AI Could Spark Global Cyber Threats to Finance

IMF managing director Kristalina Georgieva warns Anthropic’s Mythos poses major cybersecurity risks to the global financial system, urging urgent guardrails and international cooperation as regulators and central banks monitor the vulnerabilities exposed by Mythos Preview, with policymakers engaging Wall Street after an urgent regulatory meeting.

via CBS News|
#ai-governance#anthropic-mythos#business