Research
BIS bulletin weighs pros and cons of ‘front-loaded’ tightening
Recent rate increases are highly synchronised and twice as fast as previous cycles, authors say
BIS paper finds ‘mixed’ evidence of non-banks triggering spillovers
“Extreme” capital flows have not worsened, but central banks are also more active, authors note
Dollarisation did not prevent monetary financing, paper finds
IMF researchers show how Ecuador created central bank money without its own currency
Housing plays growing role in transmitting ECB policy, paper finds
Labour earnings still most important means of transmission, researchers say
ECB paper presents new corporate default prediction method
Authors say their “distance to insolvency” measure outperforms other forecasting methods
BIS paper finds reserves scarcity even during QE era
Banks still relied heavily on incoming payments to replenish funds, researchers find
Climate change may have serious effects on natural rate – ECB paper
Monetary policy may need more flexibility to deal with climate and green transition, researchers say
Climate analysis likely understates risk, say FSB and NGFS
Study finds scenario analysis struggles to capture more complicated dynamics
BIS publishes database on bitcoin adopters
Evidence suggests speculation is key motive for holding bitcoin, rather than distrust of traditional institutions
Riksbank develops model to stress-test banks’ corporate lending
New model is based on microdata on all Swedish non-financial corporations
BoE paper finds U-shaped collateral impact from central clearing
Centrally clearing all derivatives trades does not necessarily free up the most collateral
US consumers may be listening more to Fed comms, researchers say
Consumer expectations becoming more informative and less sticky, survey data suggests
ECB paper looks at impact of financial channel
Large holdings of foreign-denominated liabilities increases importance of FX moves, paper says
Nominal interest rates strongly affect savings – ECB paper
Simple models based on real rates do not accord with eurozone data, researchers find
Eurozone sovereign downgrades increased corporate risk – ECB paper
Ratings changes for “core” eurozone countries had largest effects on corporate bonds
IMF recommends using reserves ‘prudently’ to offset dollar strength
Floating currencies, IMF precautionary lines and reactivation of Fed swap lines among possible measures
ECB paper looks at Covid-19 emergency supervisory measures
Relaxation of CET1 requirements positively affected lending, but change to Pillar 2 guidance did not
Expectations are key to carbon tax’s impact, says ECB paper
Inflation may rise if consumers doubt government’s commitment to raise green taxes, research finds
Fed paper explores rate hike impact on money markets
Monetary tightening likely to impact flows in and out of Fed’s overnight repo facility
Old people hit hardest by inflation, research finds
Authors find income effects and “Fisher channel” have the biggest impact on Spanish households
IMF paper explores second-round effects of oil shocks
Authors find oil shocks have greater impact where inflation is already high
IMF paper offers ‘fear-based theory’ of economy
Central banks risk distorting the economy if they don’t move interest rates to offset “fear cycle”
Eurozone repo markets are slowing policy transmission, ECB paper says
Dealer banks use market power to get better prices from other institutions
Reverse bond auctions are useful crisis tool, ECB paper finds
DNB’s use of reverse auctions increases liquidity and stability of bill market, researchers say