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A ‘group washing machine’ and ‘tangled skein’: the failure of Slater Walker
David Rule In August 1977, the Bank of England purchased the bank Slater Walker Limited, completing its rescue. The bank had been a subsidiary of Slater Walker Securities, controlled by Jim Slater,...
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Same firms, different footprints: making sense of financed emissions
Lewis Holden Over 95% of banks’ emissions are ‘financed emissions’. These are indirect emissions from households and businesses who banks lend to or invest in (banks’ asset exposures). Banks disclose...
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Forbearance lending as a crisis management tool
Isabelle Roland, Yukiko Saito and Philip Schnattinger The Bank of England Agenda for Research (BEAR) sets the key areas for new research at the Bank over the coming years. This post is an example of...
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Nonbank lenders as global shock absorbers
David Elliott, Ralf Meisenzahl and José-Luis Peydró Capital flows and credit growth are strongly correlated across countries. Macroeconomic evidence suggests that this ‘global financial cycle’ is...
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Payments without borders: using ISO 20022 to identify cross-border payments...
James Duffy and James Sanders Understanding a payment’s journey around the globe can be difficult. As the operator of the UK’s high-value payment system (CHAPS), the Bank is all too familiar with this...
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SONIA: steady as she goes
Joanna McLafferty, Kirstine McMillan and Joseph Smart On 7 May 2024 the SONIA rate, the UK’s risk-free reference rate, printed at exactly 5.2000% and has remained there to the end of July 2024 (the...
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Convertible or not: making sense of stresses in AT1 bonds market
Mahmoud Fatouh and Ioana Neamțu Similar to the Deutsche Bank’s episode in 2016 and the Covid stress in 2020, AT1 spreads over subordinated debt rose rapidly and sharply following the Credit Swiss...
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Funding structures and resilience to shocks after a decade of regulatory reform
Kristin Forbes, Christian Friedrich and Dennis Reinhardt Recent episodes of financial stress, including the ‘dash for cash’ at the onset of the Covid-19 (Covid) pandemic, pressure in the UK’s...
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Does the bonus cap work?
Qun Harris, Ieva Sakalauskaite and Misa Tanaka After the 2007–08 Global Financial Crisis (GFC), several jurisdictions introduced remuneration regulations for banks with the aim of discouraging...
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Capitalising climate risks: what are we weighting for?
David Swallow and Chris Faint Policymakers have been investing heavily, to an accelerated timeline, to better understand the financial risks from climate change and to ensure that the financial system...
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Adapting lending policies in a ‘negative-for-long’ scenario
Miguel García-Posada and Sergio Mayordomo In February, the Bank hosted its inaugural Bank of England Agenda for Research (BEAR) conference, with the theme of ‘The Monetary Toolkit’. As part of our...
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CoCo bonds and the risk appetite of banks: sweet or sour relationship
Mahmoud Fatouh and Ioana Neamțu Since 2009, contingent convertible (CoCo) bonds have become a popular instrument European banks use to partially meet their capital requirements. CoCo bonds have a...
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Bitesize: Efficiently green? What a simple metric can tell us about banks’...
Benjamin Guin UK residential buildings account for about 15% of greenhouse gas emissions. To facilitate the transition to a low-carbon economy, the UK government aims to see many homes upgraded to an...
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Diversity in UK banks – the long journey continues
Joel Suss, Marilena Angeli and Peter Eckley Diversity has risen up the agendas of businesses, regulators, and governments in recent years. How diverse are the upper echelons of banks and building...
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Sluggish deposit rates and the effects of monetary policy
Alberto Polo Could the slow response of deposit rates to changes in monetary policy strengthen its impact on the economy? At first look, the answer would probably be ‘no’. Imperfect pass-through of...
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Does regulation bite only the less profitable? Evidence from the too big to...
Tirupam Goel, Ulf Lewrick and Aakriti Mathur Reforms following the 2008 financial crisis have led to significant increases in banks’ capital requirements. A large literature since then has focused on...
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Do large and small banks need different prudential rules?
Austen Saunders and Matthew Willison Banks come in different shapes and sizes. Do prudential regulations that work well for big banks work as well for small ones? To help us find out, we measure the...
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Where is IFRS 9 taking the cost of funding of banks?
Mahmoud Fatouh IFRS 9 versus IAS 39 In 2018, IFRS 9 came into effect, replacing IAS 39. IFRS 9 has important implications especially for banks, as they mostly hold financial assets. IAS 39 is based on...
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The Real Effects of Zombie Lending in Europe
Belinda Tracey ‘Zombie lending’ occurs when a lender supports an otherwise insolvent borrower through forbearance measures such as repayment holidays and temporary interest-only loans. The phrase was...
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Quantifying culture and its implications for bank riskiness
Joel Suss, David Bholat, Alex Gillespie and Tom Reader ‘Bad cultures’ at banks are often blamed for scandals and crises, from the global financial crisis to the mis-selling of payment protection...
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