Liquidity has the unpleasant habit of vanishing when it is needed most, and liquidity requirements for banks have the potential to make this problem work. The recent decision of the Basel Committee to broaden the set of assets eligible for the liquidity coverage ratio alleviates some of the issues – but more work is needed.
The troubled past of some securitisation products is making the comeback of this financial tool in Europe slow and fragile, but unless a bridge can be built from the current situation to an active securitisation market, the hopes for any growth in the continent will dim dramatically. Maybe the new Prime Collateralised Securities label can be that bridge.
At a time of fiscal austerity across many countries in Europe, clampdowns on tax planning by large corporates or wealthy individuals play favourably with voters. But they can also undermine competitiveness and the fragile economic recovery.
With certain banks in the core eurozone states initially passing the European Banking Authority's generic stress-tests but then needing to be saved, surely now is the time to apply more rigorous testing procedures much like those endured by banks in the eurozone periphery countries?
As regulators the world over attempt to come up with rules to prevent a repeat of the global financial crisis, the Reserve Bank of India has adhered to five basic principles of financial regulation that all central banks would do well to follow.
Latin America's up-and-coming 'multilatinas' appear to be succeeding where many have previously failed: in achieving a form of unification across the region. However, if the financial sector is to emulate its business counterpart, the tricky task of reaching a broad regulatory consensus will be essential.