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House price recovery continued in November
“UK house prices rose by 0.2% in November, after taking account of seasonal effects. This was the third successive monthly increase and resulted in an improvement in the annual rate of house price growth from -3.3% in October, to -2.0%. While this remains weak, it is the strongest outturn for nine months. Shift in interest rate expectations eases affordability pressures “There has been a significant change in market expectations for the future path of Bank Rate in recent months which, if sustained, could provide much needed support for housing market activity. “In mid-August, investors had expected the Bank of ... (full story)
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Thank you for the opportunity to speak today.1 I'm delighted to be here to celebrate the retirement of Andrea Enria, my dear friend and colleague, who has done so much to strengthen the supervision and regulation of European banks throughout his career. In my remarks, I would like to provide perspective on some of the lessons learned from the banking stress experienced in the United States last spring for both banks and their supervisors. In particular, I will focus on how banks manage liquidity risk, the role of the central bank's discount window lending in this process, and the importance of robust liquidity planning for good times and bad. Last March, several large U.S. banks faced acute liquidity pressures when uninsured depositors looked at the banks' balance sheets and judged that the banks would be insolvent if they needed to liquidate their securities portfolios to meet potential outflows. The banks' poor interest rate and liquidity risk management triggered a crisis of confidence in their uninsured depositors, resulting in liquidity crises at these banks. In short, they faced old-fashioned bank runs, the speed of which was anything but old fashioned. Despite their compliance with our capital rules, these banks lacked enough capital to reassure uninsured depositors that they had sufficient resources to weather this liquidity storm. In addition to our domestic strains, Credit Suisse came under renewed pressure in March 2023 after a long period of liquidity pressures that had been acute since the fall of 2022. Of course, Credit Suisse had been a troubled bank for some time, with doubts about its future viability after the Archegos and Greensill scandals had tarnished its reputation. These concerns became reality when the firm was forced to announce that its internal controls over financial reporting were ineffective and had been for several years. Credit Suisse was acquired by UBS in a deal that involved triggering of Credit Suisse's contingent convertible capital instruments, a severe dilution of shareholders, and the removal of senior bank management, as well as emergency liquidity support and extraordinary loss sharing from the Swiss government. While there is more that regulators and supervisors can do to help to ensure banks' interest rate risk management and capital bases are sufficiently calibrated to the risks of their business models, today I will focus most of my comments on liquidity risk management and operational readiness for firms in the United States to utilize the Federal Reserve's discount window. This is not a new topic, as I have spoken about lessons from M post: FED'S BARR: FED DISCOUNT WINDOW BORROWING SHOULDN'T HAVE STIGMA. post: FED'S BARR: DISCOUNT WINDOW IS A FINANCIAL STABILITY AND MONETARY POLICY TOOL.
Switzerland's GDP adjusted for sporting events grew at a below-average rate (+0.3%) in the third quarter of 2023, following a slight decline in the previous quarter (−0.1%).1 The ...
Charlie Munger didn’t manage to help pull off one final deal with his lifelong partner Warren Buffett, but he remained hopeful that Berkshire Hathaway , with nearly $160 billion ...
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- Posted: Dec 1, 2023 2:14am
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