Asset prices
The case for restoring the role of monetary aggregates
Tim Congdon argues that a surge in money supply in response to Covid-19 sparked heightened inflation and central banks need to refocus their attention on monetary aggregates
Paper explains why ‘Fed put’ is not as reliable as investors might like
Disagreement between Fed and market can create perception central bank is “behind the curve”
Tackling private-sector debt in the wake of the pandemic
Navigating Covid-19 debt is more of a challenge amid gathered storms of inflation and war, write Roong Mallikamas and Benjamin Weigert
Central bankers have lost sight of inflation
Inflation resurgence comes after central bankers were distracted from their primary task by climate and crypto, combined with an overreliance on new Keynesian approaches
The international effort to manage NBFI risks: where do we stand?
The Covid-19 shock demonstrated more needs to be done to address stability risks posed by the NBFI sector. Maurizio Trapanese details progress made during the Italian G20 presidency as well as outstanding macro-prudential issues
Central bank of the year: Bank of Korea
South Korea’s central bank was the first developed-world central bank to tighten policy to address inflationary risks
Regulators race to curb crypto asset money laundering
Crypto assets are increasingly used as vehicles for money laundering, but regulating them is not necessarily straightforward
Swedish central bank announces end to net asset purchases
Sveriges Riksbank forecasts it will not raise rates until 2024, saying inflation rise is temporary
How to #GreentheCBs
Invesco‘s Claudia Castro and Wim Vandenhoeck explore how central banks can strike a balance between innovation and disruption with their sustainability agendas.
Fed warns of China debt risks
Financial Stability Report mainly optimistic about systemic health, including housing market
Asset sell-off biggest threat to Chile’s financial stability – Marcel
Governor reiterates warning against further pension withdrawals
Larry Summers on stagflation risks, lessons from Delphi and never-ending ‘punch’
The former US Treasury secretary speaks about fiscal ‘overexpansion’, Fed/Treasury debt discord, the pitfalls of ‘unknown unknowns’ and central bankers ‘unable’ to remove the ‘punchbowl’
The ‘golden age’ of central banking has passed
Central banks face multi-faceted challenges and weakened autonomy amid highly polarised inflation expectations
Trends in reserve management 2021: survey results
Results of the 17th annual Reserve Management Trends survey of reserve managers conducted in February and March 2021
Research urges ECB to consider establishing ‘fossil bank’
Entity would play similar role to ‘bad banks’ established after financial crisis
Should the Fed’s Fima facility be made permanent?
The emergency repo facility reassures reserve managers about access to dollar cash during a breakdown in the US Treasuries market
The future of forward guidance
BNP Paribas Asset Management explores the current landscape around forward guidance, focusing on how central banks’ methods of communication are likely to evolve in the future. By Richard Barwell
Yellen unsettles markets with rate rise comments
Treasury secretary’s offhand comment about raising interest rates leads to stock selloff
A latent rise in r* could upend monetary policy
A rising natural rate could create serious challenges for policy-makers, write Jorma Schäublin and Philip Turner
A rebuttal of Philip Turner’s criticism of the BIS ‘house view’
Robert Pringle critiques the key findings raised in Philip Turner’s occasional paper, ‘The new monetary policy revolution: advice and dissent’
Central bank of the year: The Federal Reserve System
Overwhelming Fed interventions in March 2020 forestalled a damaging global financial crisis, as policy overhaul prompts introspection in Europe and Japan
Book notes: Asset management at central banks and monetary authorities, edited by Jacob Bjorheim
This excellent book fills a critical gap existing since IMF guidelines on asset management were revised
Fed’s 2021 stress test includes major asset price shock
CCAR will evaluate 19 largest banks; scenario includes 55% fall in equity prices
The Covid crisis, central banks and the future
Crisis responses have had positive initial outcomes, but also exacerbated significant underlying challenges that raise concerns related to exit strategies and the future for central banks