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International Settlement

The Bank for International Settlements (BIS) is an international company limited by shares owned by central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks". The BIS carries out its work through subcommittees, the secretariats it hosts and through an annual general meeting of all member banks. It also provides banking services, but only to central banks and other international organizations. It is based in Basel, Switzerland, with representative offices in Hong Kong and Mexico City.

Articles by International Settlement

Introduction of guidelines on interaction and cooperation between prudential and AML/CFT supervision

5 days ago

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Consultative

 | 
08 November 2019
 | 

Status:  Open
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PDF full text (308kb)
 | 
20 pages

Topics:
Anti money laundering

The Basel Committee is consulting on Introduction of guidelines on interaction and cooperation between prudential and AML/CFT supervision.
Consistent with the goals and objectives of the standards issued by the Financial Action Task Force (FATF) and principles and

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China’s Shadow Banking: Bank’s Shadow and Traditional Shadow Banking

5 days ago

BIS Working Papers
 | 
No 822
 | 
08 November 2019

by 

Guofeng Sun

PDF full text (1,052kb)
 | 
47 pages

Focus
Banks’ shadow, or money creation by banks beyond traditional loans, plays an important role in China’s money-creation process. This poses a number of challenges to monetary policy operations and financial risk management. This paper analyses the money-creation mechanisms of China’s shadow banking sector in detail, provides accurate measurements, investigates its effects on financial risk and surveys recent regulations.
Contribution
The analysis highlights the critical role of

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Regulatory Consistency Assessment Programme (RCAP): Assessment of Basel large exposures regulations – China

6 days ago

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Implementation reports

 | 
07 November 2019
 | 

Status:  Current

PDF full text (249kb)
 | 
16 pages

Topics:
Liquidity risk,
Credit risk,
Supervisory cooperation

Through its Regulatory Consistency Assessment Programme (RCAP), the Basel Committee monitors the timely adoption of regulations by its members, assesses the regulations’ consistency with the Basel framework and examines the consistency of

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Regulatory Consistency Assessment Programme (RCAP): Assessment of Basel large exposures regulations – Argentina

6 days ago

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Implementation reports

 | 
07 November 2019
 | 

Status:  Current

PDF full text (286kb)
 | 
18 pages

Topics:
Liquidity risk,
Credit risk,
Supervisory cooperation

Through its Regulatory Consistency Assessment Programme (RCAP), the Basel Committee monitors the timely adoption of regulations by its members, assesses the regulations’ consistency with the Basel framework and examines the consistency of

Read More »

Regulatory Consistency Assessment Programme (RCAP): Assessment of Basel NSFR regulations – China

6 days ago

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Implementation reports

 | 
07 November 2019
 | 

Status:  Current

PDF full text (294kb)
 | 
18 pages

Topics:
Liquidity risk,
Credit risk,
Supervisory cooperation

Through its Regulatory Consistency Assessment Programme (RCAP), the Basel Committee monitors the timely adoption of regulations by its members, assesses the regulations’ consistency with the Basel framework and examines the consistency of

Read More »

Regulatory Consistency Assessment Programme (RCAP): Assessment of Basel NSFR regulations – Argentina

6 days ago

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Implementation reports

 | 
07 November 2019
 | 

Status:  Current

PDF full text (321kb)
 | 
19 pages

Topics:
Credit risk,
Supervisory cooperation,
Liquidity risk

Through its Regulatory Consistency Assessment Programme (RCAP), the Basel Committee monitors the timely adoption of regulations by its members, assesses the regulations’ consistency with the Basel framework and examines the consistency of

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Turning up the heat – climate risk assessment in the insurance sector

7 days ago

FSI Papers
 | 
No 20
 | 
06 November 2019

by 

Patrick Cleary,

William Harding,

Jeremy McDaniels,

Jean-Philippe Svoronos and

Jeffery Yong

PDF full text (636kb)
 | 
43 pages

Executive Summary (95 KB, PDF)

Climate risks are recognised as a critical threat to society, with potentially adverse implications for financial stability and the viability of insurers. Efforts have been made by insurance supervisors and insurers in some jurisdictions to better understand climate risks, but further efforts are needed. To facilitate a better understanding in this area, this

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What do almost 20 years of micro data and two crises say about the relationship between central bank and interbank market liquidity? Evidence from Italy

9 days ago

BIS Working Papers
 | 
No 821
 | 
04 November 2019

by 

Massimiliano Affinito

PDF full text (724kb)
 | 
59 pages

Focus
This paper studies whether central bank liquidity provisions spur or inhibit interbank market liquidity exchanges, or do not affect them at all. In other words, it studies whether the relationship between central bank and interbank liquidity is complementary or substitutive, and whether the relationship changes in the event of interbank market impairments and massive central bank liquidity injections during global and sovereign crises.
Contribution
The analysis of the

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Newsletter on buffer usability

13 days ago

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

This version

BCBS
 | 

Newsletters

 | 
31 October 2019
 | 

Status:  Current

Topics:

As part of its ongoing work programme on evaluating and monitoring the impact of its post-crisis reforms, the Basel Committee on Banking Supervision has considered the usability of capital buffers. This work has included engagement with a wide range of stakeholders, including banks, bank investors and other market participants, to discuss their views on the role of these

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Foreign exchange reserves in Africa: benefits, costs and political economy considerations

13 days ago

BIS Papers
 | 
No 105
 | 
31 October 2019

by 

Jochen Schanz

PDF full text (444kb)
 | 
14 pages

Foreign exchange reserves are an integral part of the policy toolkit in African countries. Based on a survey of African central banks, this paper relates the reasons for holding reserves to some of the economic circumstances in their countries. It also discusses how African central banks address any political economy challenges arising from investing scarce resources into safe but low-yielding foreign exchange reserves.
JEL classification: F31, E58, D72
Keywords: monetary policy, foreign

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Reserve management and FX intervention

13 days ago

BIS Papers
 | 
No 104
 | 
31 October 2019

PDF full text (6,584kb)
 | 
270 pages

Papers in this volume were prepared for a meeting of senior officials from central banks held at the Bank for International Settlements.
Foreign exchange (FX) reserves are an integral part of emerging market economy (EME) central banks’ policy toolkit. They insure against shocks and complement monetary policy to achieve price and financial stability. Over the last decades, they have surged from, on average, 5% of GDP in 1990 to almost 30% in 2018. This raises several interrelated issues that are explored in this volume.

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Reducing the risk of wholesale payments fraud related to endpoint security: a toolkit

22 days ago

Version 1, October 2019

CPMI Papers
 | 
No 188
 | 
22 October 2019

PDF full text (1,187kb)
 | 
77 pages

In May 2018, the CPMI published a strategy to encourage and help focus industry efforts to reduce the risk of wholesale payments fraud related to endpoint security.
Operationalisation of the strategy depends on operators, participants and other stakeholders engaging and taking ownership of developing and carrying out an action plan for their jurisdictions. Each CPMI member central bank, and the CPMI as a whole, is committed to making the strategy operational. Likewise, Governors

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Investigating the impact of global stablecoins

27 days ago

CPMI Papers
 | 
No 187
 | 
18 October 2019

PDF full text (556kb)
 | 
37 pages

Payments are in a state of flux, and innovation is extensive. Domestic payments, in most instances, are increasingly convenient, instantaneous and available 24/7. Yet, despite significant improvements in recent years, current payment systems still have two major failings: lack of universal access to financial services for a large share of the world’s population and inefficient cross-border retail payments. The private and public sectors must continue to explore innovative ways to make payments better, reduce inefficiencies

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The suptech generations

27 days ago

FSI Papers
 | 
No 19
 | 
17 October 2019

by 

Stefan Hohl,

Arend Kulenkampff and

Jermy Prenio

PDF full text (911kb)
 | 
24 pages

Executive Summary (91 KB, PDF)

Financial authorities’ use of technology has evolved over the years, leading to different generations of technology that culminate in what the paper considers as suptech. Suptech refers to the application of big data or artificial intelligence (AI) to tools used by financial authorities. There are many ways of exploring suptech tools and these are not mutually exclusive. They range from developing explicit suptech

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Seventeenth progress report on adoption of the Basel regulatory framework

28 days ago

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

Sixteenth progress report on adoption of the Basel regulatory framework

7 May 2019

Type:  Implementation reports

Status:  Superseded

This version

BCBS
 | 

Implementation reports

 | 
16 October 2019
 | 

Status:  Current

PDF full text (712kb)
 | 
82

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Policy Uncertainty and Bank Mortgage Credit

28 days ago

BIS Working Papers
 | 
No 820
 | 
16 October 2019

by 

Gazi I Kara and

Youngsuk Yook

PDF full text (413kb)
 | 
50 pages

Focus
The uncertainties associated with possible changes in government leadership or policy can affect the behaviour of firms through various channels, such as industry regulation, monetary and trade policy, and taxation. Indeed, a growing literature shows that non-financial firms cut back investment expenditure when they face policy uncertainty around elections. However, it is an open question how policy uncertainty would affect banks’ lending behaviour. And it is

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Dollar exchange rate as a credit supply factor – evidence from firm-level exports

October 14, 2019

BIS Working Papers
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No 819
 | 
14 October 2019

by 

Valentina Bruno and

Hyun Song Shin

PDF full text (450kb)
 | 
53 pages

Focus
A broad appreciation of the dollar dampens international trade by weighing on the operation of credit-intensive global value chains (GVCs). 
Contributions
We are accustomed to drawing an automatic link between exchange rates and export performance through the textbook trade competitiveness channel according to which a strong US dollar boosts exports of non-US economies. Paradoxically, a strong dollar may actually serve to dampen trade volumes, rather

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Predicting recessions: financial cycle versus term spread

October 11, 2019

This paper is an extension of "The financial cycle and recession risk", BIS Quarterly Review, December 2018, by the same authors. 

BIS Working Papers
 | 
No 818
 | 
11 October 2019

by 

Claudio Borio,

Mathias Drehmann and

Dora Xia

PDF full text (323kb)
 | 
29 pages

Focus
Since the mid-1980s, the nature of recessions has changed from inflation-induced to financial cycle-induced recessions. Against this backdrop, this paper formally assesses the forecasting performance of financial cycles to predict recessions in a panel of countries. We compare the signalling

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Governance Arrangements for critical OTC derivatives data elements (other than UTI and UPI)

October 9, 2019

CPMI Papers
 | 
No 186
 | 
09 October 2019

PDF full text (403kb)
 | 
26 pages

G20 Leaders agreed in 2009 that all over-the-counter (OTC) derivatives contracts should be reported to trade repositories (TRs) as part of their commitment to reforming OTC derivatives markets with the aim of improving transparency, mitigating systemic risk and preventing market abuse. Aggregation of the data reported across TRs will help ensure that authorities can obtain a comprehensive view of the OTC derivatives market and its activity. 
Following the 2014  FSB Feasibility study on approaches to aggregate OTC

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Large central bank balance sheets and market functioning

October 7, 2019

Report prepared by a Study Group chaired by Lorie Logan (Federal Reserve Bank of New York) and Ulrich Bindseil (European Central Bank).

Markets Committee Papers
 | 
No 11
 | 
07 October 2019

PDF full text (4,195kb)
 | 
91 pages

[embedded content]

Philip Lowe, Chair of the Committee on the Global Financial System, and Jacqueline Loh, Chair of the Markets Committee discuss two major reports on the implementation and implications of unconventional monetary policy tools (UMPTs) introduced by central banks in response to the financial

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Monetary policy frameworks and central bank market operations

October 7, 2019

This version supersedes the version dated May 2009.

Markets Committee Papers
 | 
07 October 2019

PDF full text (1,073kb)
 | 
95 pages

Central banks’ decisions and actions are shaped by their operational frameworks, which evolve as market conditions, policy goals, and the structure of financial markets change. While these monetary policy operating frameworks share a number of similarities, there are also noticeable differences. 
The Markets Committee serves as a key forum for central banks to discuss the specific features of their own market operations and the impact of these operations on financial

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Unconventional monetary policy tools: a cross-country analysis

October 7, 2019

Report prepared by a Working Group chaired by Simon M Potter (Federal Reserve Bank of New York) and Frank Smets (European Central Bank).

CGFS Papers
 | 
No 63
 | 
07 October 2019

PDF full text (1,656kb)
 | 
85 pages

[embedded content]

Philip Lowe, Chair of the Committee on the Global Financial System, and Jacqueline Loh, Chair of the Markets Committee discuss two major reports on the implementation and implications of unconventional monetary policy tools (UMPTs) introduced by central banks in response to the financial crisis and

Read More »

Monetary policy hysteresis and the financial cycle

October 3, 2019

BIS Working Papers
 | 
No 817
 | 
03 October 2019

by 

Phurichai Rungcharoenkitkul,

Claudio Borio and

Piti Disyatat

PDF full text (1,580kb)
 | 
44 pages

Focus
What if monetary policy impart a long-run impact on output and inflation-adjusted interest rates -"non-neutrality"? What are the implications for the conduct of policy?
Contribution
We propose a stylised model with long-run monetary policy non-neutrality based on two key features. First, households have finite planning horizons and banks extend loans as well as create inside money, which is essential for economic

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The reaction function channel of monetary policy and the financial cycle

October 2, 2019

BIS Working Papers
 | 
No 816
 | 
02 October 2019

by 

Andrew Filardo,

Paul Hubert and

Phurichai Rungcharoenkitkul

PDF full text (2,954kb)
 | 
42 pages

Focus
Financial stability is key in monetary policy deliberation. There is ample evidence that low interest rate levels create financial imbalances. But how policy reacts to macro-financial developments could also matter. This is the subject of this paper.
Contribution
We measure how responsive US monetary policy appears to be to imbalances in equity, housing and credit markets. We examine if this policy sensitivity predicts

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Basel III Monitoring Report

October 2, 2019

Summary of document history  

Previous version
Previousconsultation
This version
Subsequentconsultation
Subsequentversion

Basel III Monitoring Report

20 Mar 2019

Type:  QIS

Status:  Current

This version

BCBS
 | 

QIS

 | 
02 October 2019
 | 

Status:  Current

PDF full text (5,709kb)
 | 
189 pages

Topics:
QIS – Quantitative Impact Study

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Fragmentation in global financial markets: good or bad for financial stability?

October 1, 2019

BIS Working Papers
 | 
No 815
 | 
01 October 2019

by 

Stijn Claessens

PDF full text (530kb)
 | 
29 pages

Focus
How does financial market fragmentation relate to financial stability? Does more fragmentation always imply less financial stability? Alternatively, might there be a trade-off between the two, with more fragmentation enhancing financial stability in some cases? Taking a cross-jurisdictional perspective, this paper reviews the literature with the aim of shedding light on the issue and making suggestions for further analysis.
Contribution
The paper sets out various definitions of

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Interest rate spillovers from the United States: expectations, term premia and macro-financial vulnerabilities

September 27, 2019

BIS Working Papers
 | 
No 814
 | 
27 September 2019

by 

Aaron Mehrotra,

Richhild Moessner and

Chang Shu

PDF full text (240kb)
 | 
17 pages

Focus
The close co-movement between long-term interest rates internationally has been well documented. However, there is only limited understanding about how changes in the individual components of long-term rates – expectations of real rates and inflation, and the term premia – are transmitted internationally. The relative strength of the spillovers from the different components could differ. While the distinction is not clear cut,

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Modelling yields at the lower bound through regime shifts

September 24, 2019

BIS Working Papers
 | 
No 813
 | 
24 September 2019

by 

Peter Hördahl and

Oreste Tristani

PDF full text (396kb)
 | 
52 pages

Focus
Following the 2008-09 crisis, a number of central banks cut monetary policy rates to levels close to the effective lower bound. We propose a regime-switching approach to deal with the lower bound in dynamic term structure modelling.
Contribution
Our model allows the drivers (state variables) of yields to evolve according to separate laws of motion in normal times and at the lower bound. The model is able to capture important differences in the way the

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BIS Quarterly Review, September 2019

September 22, 2019

Markets swing on trade and monetary policy

BIS Quarterly Review
 | 
22 September 2019

PDF full text (1,536kb)
 | 
126 pages
 | 
ePub

On-the-record remarks
Read the remarks by Mr Claudio Borio, Head of the Monetary and Economic Department, and Mr Hyun Song Shin, Economic Adviser & Head of Research, at the media briefing on 20 September 2019.

Contents
International banking and financial market developments
Special features
Quarterly Review boxes

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Steady-state growth

September 20, 2019

BIS Working Papers
 | 
No 812
 | 
20 September 2019

by 

Emanuel Kohlscheen and

Jouchi Nakajima

PDF full text (352kb)
 | 
20 pages

Focus
The paper presents a new benchmark against which current economic growth rates of different economies can be assessed at any point in time. The measure can be used, for instance, to assess whether there is any risk of overheating or of build-up of excessive slack.
Contribution
The paper computes steady-state economic growth – defined as the rate of growth that the economy would converge to in the absence of any new shocks. We show that current

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