The European Central Bank (ECB) warned on Monday that increased financial regulation could lead to other kinds of risk-taking that officials will have to keep in their sights.
Responses by banks and other financial institutions to measures aimed at preventing future crises will have to be followed carefully, “and attention must be directed to detect new risks that may emerge from the reaction to the new regulations,” ECB Vice President Vitor Constancio told a conference in Frankfurt, Germany.
“For instance, the increase in the cost of capital may lead to strategies by financial institutions, to more risky activities and projects or to the creation of new types of non-regulated entities to conduct financial business,” he said.
“The perimeter of regulated institutions risks becoming a sort of moving target,” Constancio said.
Authorities worldwide have been pressed to tighten oversight of banks, insurers, hedge funds, brokers and private equity funds, among others, to ensure that taxpayers are not forced to back more massive bailouts like those seen since in 2007 and 2008.
Banks counter that increased regulations will force them to curb lending to the wider economy, a crucial element in ensuring an uncertain recovery does not falter.
Constancio reminded the academics and central bank officials gathered in Germany’s financial capital that some major changes lay ahead.
“The general overhaul of regulation that has been recently decided or is being prepared has far-reaching implications from the point of view of macro-prudential policy,” he said.
“The increase of capital and liquidity requirements, the limits to leverage, the new framework to deal with derivatives, the measures to address the problem of institutions ‘too big to fail’ either through higher loss absorption capacity or better resolution schemes — are all measures that contain important elements responding to macro-prudential concerns,” he said.
FIREPOWER: On top of the torpedoes, the military would procure Kestrel II anti-tank weapons systems to replace aging license-produced M72 LAW launchers Taiwan is to receive US-made Mark 48 torpedoes and training simulators over the next three years, following delays that hampered the navy’s operational readiness, the Ministry of National Defense’s latest budget proposal showed. The navy next year would acquire four training simulator systems for the torpedoes and take receipt of 14 torpedoes in 2027 and 10 torpedoes in 2028, the ministry said in its budget for the next fiscal year. The torpedoes would almost certainly be utilized in the navy’s two upgraded Chien Lung-class submarines and the indigenously developed Hai Kun, should the attack sub successfully reach operational status. US President Donald Trump
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to start construction of its 1.4-nanometer chip manufacturing facilities at the Central Taiwan Science Park (CTSP, 中部科學園區) as early as October, the Chinese-language Liberty Times (the Taipei Times’ sister newspaper) reported yesterday, citing the park administration. TSMC acquired land for the second phase of the park’s expansion in Taichung in June. Large cement, construction and facility engineering companies in central Taiwan have reportedly been receiving bids for TSMC-related projects, the report said. Supply-chain firms estimated that the business opportunities for engineering, equipment and materials supply, and back-end packaging and testing could reach as high as
ALL QUIET: The Philippine foreign secretary told senators she would not respond to questions about whether Lin Chia-lung was in the country The Ministry of Foreign Affairs on Wednesday confirmed that a business delegation is visiting the Philippines, but declined to say whether Minister of Foreign Affairs Lin Chia-lung (林佳龍) is part of the group, as Philippine lawmakers raised questions over Lin’s reported visit. The group is being led by Deputy Minister of Agriculture Huang Chao-chin (黃昭欽), Chinese International Economic Cooperation Association (CIECA) chairman Joseph Lyu (呂桔誠) and US-Taiwan Business Council (USTBC) vice president Lotta Danielsson, the ministry said in a statement. However, sources speaking on condition of anonymity said that Lin is leading the delegation of 70 people. Filinvest New Clark City Innovation Park
DEFENSIVE EDGE: The liaison officer would work with Taiwan on drones and military applications for other civilian-developed technologies, a source said A Pentagon unit tasked with facilitating the US military’s adoption of new technology is soon to deploy officials to dozens of friendly nations, including Taiwan, the Financial Times reported yesterday. The US Department of Defense’s Defense Innovation Unit (DIU) is to send a representative to collaborate with Taiwan on drones and military applications from the semiconductor industry by the end of the year, the British daily reported, citing three sources familiar with the matter. “Drones will certainly be a focus, but they will also be looking at connecting to the broader civilian and dual-use ecosystem, including the tech sector,” one source was
RSS