Monetary Policy
BIS paper presents interbank money market model
Researchers produce ‘search-based’ model designed to reflect interbank markets in the presence of a central bank corridor system, allowing them to compute the effective interest rate
Economists outline improved DSGE forecasting method
Bank of England working paper attempts to improve forecast performance by using a multi-step approach to estimating parameters, delivering what the authors say are ‘significant’ improvements
Central bankers must research QE’s effects on inequality, Italian deputy governor says
Central banks must improve their understanding of how expansionary monetary policy affects inequality in developed economies, says Fabio Panetta
Sweden faces ‘economic crisis’ unless government calms housing market, governor warns
Sweden’s government needs to take urgent action to calm rapidly rising house prices or face a possible economic crisis, Stefan Ingves warns; attacks lack of clarity over macro-prudential policy
‘We will do what we must’ to hit target, says Draghi
ECB governor hints at further easing at next month’s monetary policy meeting
Policy-makers must be prepared to handle Fed rate rise, Fischer says
Emerging market central bankers must be sure US rate rises do not have ‘major consequences’, Fed vice-chairman says; shift to more consumer-led Asian growth may benefit other economies
Trinidad and Tobago aims to stay a step ahead of the Fed
Jwala Rambarran tells Central Banking the central bank must remain ‘ahead of the curve’ and ensure a ‘strong enough’ rate differential between assets denominated in local and US currency
Shift in FOMC language intended to show December hike ‘may well become appropriate’
Minutes from October meeting reveal thinking behind change in language; a ‘couple’ of members raised concerns the change could be misinterpreted as a stronger signal than it was
Mass walkout at RBI disrupts clearing and settlement
The majority of the RBI’s 17,000 staff took ‘mass casual leave’ today, interrupting some RBI operations, though normalcy was ‘largely’ restored after negotiations
Sarb raises rate 25bp now to avoid bigger move later
Increasing risk of inflation spurs the South African Reserve Bank to raise its key rate by 25 basis points to 6.25%; two out of six MPC members preferred not to move
Dallas Fed’s Kaplan expects policy to ‘remain accommodative for some time’
Federal Reserve Bank of Dallas president says FOMC was ‘prudent’ to wait for more data in past few months; it is ‘probable’ rates will be lifted gradually
Mexico should ‘phase out’ daily FX sales, IMF staff say
Staff at IMF find interventions have ‘contributed to stability’ in the foreign exchange market, while a report following Article IV consultations recommends moving away from daily auctions
Honohan sets out virtues of new crisis tools in final speech
Irish governor stresses potential of direct recapitalisation and GDP-linked loans to help bolster debt sustainability in crisis-hit countries; expects successor Lane to come in with ‘big broom’
Market and survey-based measures of expectations provide useful information, ECB paper says
Survey-based and market-based measures of inflation expectations provide useful information on future eurozone price increases, a European Central Bank paper argues
Changing funding patterns cut both ways for emerging markets, central bankers say
Emerging markets are moving towards greater use of capital market funding, but while this could bring benefits for monetary policy, it also throws up a host of stability risks
Turkish paper finds Fed staff forecasts superior to rivals
Working paper finds forecasts in the ‘Greenbook’ were consistently more accurate than their commercial equivalents between 1974 and 2009
Canadian paper sees costs to leaning against the wind
Research estimates difference in policy rates between ‘lean’ and ‘clean’ central banks, while identifying costs in terms of inflation and output deviations
BoE researchers model trend inflation with ambiguity
Researchers develop a model featuring positive trend inflation determined in part by the degree of ambiguity around central bank actions
Russian corporate banking recovers despite sanctions and oil price fall, governor says
Bank of Russia ready to expand for large-scale foreign exchange operations if oil price falls
Dudley leads Fed speeches as December meeting looms
William Dudley says conditions necessary for rate hike ‘could soon be satisfied’ but notes concerns about inflation outlook; Evans, Fischer and Lacker also speak on US outlook
BIS paper models non-linear eurozone crisis impact
Researchers attempt to capture endogenous amplification mechanisms in causing widened lending spreads during eurozone crises
Identifying the effects of structural shocks exposes problems with real-time data, researchers say
Using a model that identifies the effects of structural shocks, the paper finds ‘substantial and systematic’ differences between ways real-time and final data respond to monetary shocks
Challenging crosscurrents from divergent monetary policy
Divergent monetary policies around the world and challenges linked to China’s economic rebalancing present central bankers with some opportunities as well as numerous threats
