Macro-prudential Policy: Implementing the Financial Stability Mandate

Macro-prudential Policy: Implementing the Financial Stability Mandate

Macro-prudential Policy: Implementing the Financial Stability Mandate

Course Chair: Maria Nieto, Advisor in the Directorate of Financial Stability, Regulation and Resolution, Bank of Spain

Tuesday - 28 May 2019

Macro-prudential Policy: Navigating a Volatile Landscape

Global imbalances and financial stability: understanding the dynamics

Eva Hüpkes, Adviser, Regulatory Policy and Cooperation, Financial Stability Board

 

  • Key factors and dynamics shaping the financial stability landscape in 2019
  • Overview of emerging financial, operational and conduct risks
  • New roles and responsibilities for financial regulators and supervisors
  • Discussion: Impact of the FSB’s 2019 agenda on local jurisdictions and the global financial system

Climate risks as the new source of systemic instability

Maria Nieto, Advisor in the Directorate of Financial Stability, Regulation and Resolution, Bank of Spain

 

  • Implications of climate change for the stability of financial systems
  • Overview of key transition, physical and liability risks
  • The role of financial policy and regulation in effective climate risk mitigation
  • Hands-on exercise: Application of supervisory tools and prudential responses

Will a cyber-attack cause the next financial crisis?

Panel with Thomas Huertas, Partner and Chair, EY Global Regulatory Framework; and former Director, Banking Sector, Financial Services Authority, Eva Hüpkes, Adviser, Regulatory Policy and Cooperation, Financial Stability Board and David Porter, Senior Advisor, Security and Privacy Division, Bank of England

 

  • Overview of financial, operational and regulatory risks for infrastructures based on computer systems and digital information
  • Examples of systemic implications of successful cyber attacks
  • Key features of effective cyber resilience frameworks and strategies
  • The role of cross-industry guidance and public-private cooperation and coordination

Wednesday - 29 May 2019

Building an Effective Framework for Systemic Risk

Macro-prudential policy in 2019: operationalising the systemic framework

Thomas Huertas, Partner and Chair, EY Global Regulatory Framework; and former Director, Banking Sector, Financial Services Authority

 

  • The state of the art of macro-prudential policy
  • Examples of good practice in monitoring, reporting and counteracting threats
  • Opportunities and challenges for coordination with the price stability mandate and micro-prudential responsibilities
  • Discussion: Would macro-prudential oversight have prevented the last crisis? (And will it prevent the next one?)

Financial stability implications of crypto assets and CBDC

Robleh Ali, former Manager, Digital Currencies, Bank of England (invited)

 

  • Differences and overlaps between central bank digital currency and privately issued crypto assets
  • Tips for effectively managing financial stability implications of ‘Bitcoins’ on both local and systemic levels
  • Impact of central bank digital currency on financial services providers
  • Discussion: How to manage cross-country flows of digital money?

 

The institutional alignment of macro- and micro-prudential policy: the case of the euro area

John Fell, Deputy Director General, Macro-prudential Policy and Financial Stability, European Central Bank

 

  • Tips for effective coordination and calibration of macro- and micro-prudential policy
  • Implications for institutional arrangements and organisation
  • Examples of mechanisms for a continuous exchange of information for conflict resolution
  • Case study: Macro- and micro-prudential supervision in the euro area

Systemic stress-testing: the state of the art

Karsten Gerdrup, Director, Monetary Policy and Financial Stability Modelling, Norges Bank

 

  • The evolving role of systemic stress-testing in financial stability
  • Key features of effective stress-testing models and frameworks
  • Opportunities and challenges of disruptive technological innovation
  • Case study: Stress-testing of the banking system in Norway

The shadow banking system: identifying systemic risks and how to address them

Anand Sinha, former Deputy Governor, Reserve Bank of India

 

  • The state of the art of the shadow banking sector
  • Overview of the institutional make-up and interconnections within it and with the regulated sector
  • Assessment of the recent FSB’s Global Shadow Banking Monitoring Report
  • Tips to overcome issues of cross-jurisdictional regulatory cooperation and coordination

Thursday - 30 May 2019

New Developments in the Financial Stability Toolkit

RegTech and SupTech: new opportunities in financial stability and systemic risk analysis

Beju Shah, Head of Data Collection and Publication, Bank of England

 

  • Technological foundations of regulatory and supervisory technology
  • The impact of RegTech and SupTech on financial services industry
  • Key applications in regulatory reporting and compliance risk management
  • Discussion: How to supervise technological innovation?

The central credit register and effective calibration of macro-prudential instruments

Selva Bahar Baziki, Director, Banking and Financial Institutions Department, Central Bank of the Republic of Turkey

 

  • Overview of central credit registers as micro- and macro-prudential tools
  • Examples of credit register data applications for detecting risk build-up and concentration
  • Tips for calibration of macro-prudential instruments and assessment of their effectiveness
  • Case study: Building a new central credit register framework

How to make the most of Big Data, DLT and Machine Learning: practical steps

Panel with Beju Shah, Head of Data Collection and Publication, Bank of England; Selva Bahar Baziki, Director, Banking and Financial Institutions Department, Central Bank of the Republic of Turkey and Anne Leslie-Bini, Managing Director, Pikcio RegTech

 

  • Examples of regulatory and supervisory applications of Blockchain (and DLT), Big Data analytics, Machine Learning and Cloud Computing
  • Opportunities and challenges of APIs (Application Programming Interface) and new software platforms for financial stability and systemic risk analysis
  • Implications for central banks’ resourcing and institutional organisation
  • The role of cooperation and coordination with the private sector

 

Friday - 31 May 2019

Looking Towards the Future: Innovations, Opportunities and Challenges

What is the true potential of machine readability in regulation and supervision?

Anne Leslie-Bini, Managing Director, Pikcio RegTech

 

  • The state of the art of machine-readable regulation
  • Opportunities and challenges for risk-based supervision, data quality assessment, and closing of the gap between regulatory intention and interpretation
  • The emerging role of cognitive compliance
  • Discussion: Does machine-executed regulation represent a realistic and desirable goal?

The emerging sources of financial instability for 2020 and beyond

Olivier DeBandt, Director of Research, Prudential Supervision Authority, Banque de France (invited)

 

  • Overview of short-term and long-term threats to financial stability
  • Assessment of reports, frameworks and approaches by global authorities including the IMF, Basel Committee and the United Nations
  • Key expectations in relation to financial stability implications of climate, cyber and technology risks
  • Discussion: What are the ‘most feared’ sources of financial instability in delegates’ home jurisdictions for 2020 and beyond?

Action points and key takeaways

Maria Nieto, Advisor in the Directorate of Financial Stability, Regulation and Resolution, Bank of Spain

 

  • Summary of the training course
  • Discussion of the observed trends and case studies
  • Application of learning points in the delegates’ home organisations
  • Preparation of action points