The Basel Committee on Banking Supervision and the International Organization of Securities Commissions (IOSCO) have today published a second consultative paper which represents a near-final proposal on margin requirements for non-centrally-cleared derivatives. The margin requirements for non-centrally cleared derivatives are articulated through key principles addressing eight (8) main elements: Appropriate margining practices should be in place
This paper explores the concept of global liquidity based on a factor model estimated using a large set of financial and macroeconomic variables from 24 advanced and emerging market economies. We measure global liquidity conditions based on the common global factors in the dynamics of liquidity indicators. By imposing theoretically motivated sign restrictions on factor
Reverse stress testing is one of the hottest topics around the world in banking sector. Reverse stress testing is conducted as a complementary stress test along with other general stress tests. The key difference is that with a reverse stress test, the financial institution identifies the kind of scenarios that threaten the sheer survival of
In most countries, the central bank of the country, such as the Federal Reserve in the US, place reserve requirements in the form of cash reserve ratios on the commercial banks. Under the reserve requirements, each commercial bank is required to hold a certain portion of funds collected as deposits in the form of reserves.
A new bank called Gobank is a new kind of checking account which operates just through a mobile app. It operates under the company Green Dot Bank and is planning to not open any branches for the bank. To operate your checking account all you have to do is to login into the app. The
The financial crisis that began in 2007 revealed that many banks, including global systemically important banks (G-SIBs), were unable to aggregate risk exposures and identify concentrations fully, quickly and accurately. This meant that banks’ ability to take risk decisions in a timely fashion was seriously impaired with wide-ranging consequences for the banks themselves and for
In this presentation, made at GARP chapter meeting, Prof. Albert Ip provides a risk evaluation framework in credit lending. It discusses the general credit lending business practices, and then moves on to how risk can be managed in a credit portfolio.
This article explains how a credit card transaction is process using the example of VISA. Transaction processing involves the routing of payment information and related data to facilitate the authorization, clearing and settlement of transactions between Visa issuers, which are the financial institutions that issue Visa cards to cardholders, and acquirers, which are the financial
Corporate bond issuers in emerging economies in Asia have often had a choice between an onshore market and an offshore one. Since 1998, however, many of these issuers have increasingly turned to the onshore market. This paper provides lessons from onshore and offshore corporate bond finance in Asian emerging markets. It investigates systematically what factors
Banks are among our enduring of financial institutions. Their survival in so many different historical periods is testimony to their importance. Professor Shiller traces the origins of interest rates from Sumeria in 2000 BC, to ancient Greece and Rome, up to the Song Dynasty in China between the 10th and the 12th century. Subsequently, he