Monetary Policy
BoE’s Cunliffe says odd behaviour of labour supply demands caution
Deputy governor points to possible ‘shift in the psychology’ of workers who have come to accept low pay, which he says calls for the central bank to be cautious about raising rates too soon
Ingves mulls asset purchases as Riksbank cuts repo rate to zero
Asset purchases could be on the cards if historic cut fails to boost inflation, says governor; rates expected to stay at zero until mid-2016
French paper considers impact of TLTROs on funding costs
Banque de France economist examines the funding conditions attached to the ECB’s targeted long-term refinancing operations; sees potential benefits for banks
Serbian central bank dismisses losses as ‘accounting measure’
National Bank of Serbia loses $462 million in 2013; attributes it to range of factors including falling gold prices and a new ‘corporate profit tax’ on non-profit organisations
BoE paper tests optimal policy when workers lose skills
Working paper asks how optimal monetary policy is affected by ‘human capital depreciation’; finds strict inflation targeting can be improved upon
Bank of Mexico’s Sánchez considers EM response to tighter Fed policy
Deputy governor says emerging markets will need to contend with the end of the ‘financial bonanza’ that surfaced in the wake of the crisis, and must consolidate
Rajan overruled external members’ call for rate cut in September
External members on RBI’s technical advisory committee see the case for easing, and the majority voted for a rate cut in September; deputy governor portfolios shaken up
Broadbent: Neutral real rates will stay low for ‘some time’
Bank of England deputy governor Ben Broadbent expects neutral real rates of interest to rise ‘eventually’, but expects them to remain low ‘for some time yet’
IMF paper sees EU inflation expectations holding firm
Working paper says low core inflation in eurozone has had ‘significant’ impact on the rest of the region, though the main driver of disinflation remains food and energy prices
BoE minutes hint at dovish shift
Committee still split 7-2 in favour of holding rates, but language takes a more dovish tone with housing market and external environment providing cause for concern
West African countries take stock of ‘capacity building project’
The West African Monetary Institute is hiring an external consultant to review the $2 million project, as it works towards establishing second monetary union in region
Fed paper models impact of return to normal rates
Discussion paper studies the likely effect of returning interest rates to more normal levels; finds different combinations of tools would have different effects on financial intermediation
ECB taking minutes leak ‘very seriously’
Quotes from governing council discussions between May 2012 and January 2013 appear in press; reveal Jens Weidmann’s concerns over ELA provided to Cypriot bank
French paper examines impact of ECB policy changes on asset prices
Working paper considers how ‘policy shocks’ affected short-term interest rates, as well as the expected future path of short-term interest rates, between 2002 and 2013
SBP launches shariah-compliant open market operations
Islamic banks in Pakistan will now have access to central bank liquidity operations; survey reveals strong demand for Islamic finance in the country, but coverage remains patchy
Mersch: Asset buying may widen income inequality
Non-standard measures ‘shouldn’t last too long’, according to ECB executive board member Yves Mersch, because they could ‘widen income inequality’
Poloz recommends dropping forward guidance as conditions normalise
Bank of Canada governor suggests there are better ways of communicating when conditions normalise; most respondents to CentralBanking.com poll agree
BoE’s Haldane sees UK economy ‘writhing in both agony and ecstasy’
Chief economist sees reasons to be both optimistic and pessimistic about the UK economy, but says on balance rates are likely to have to stay lower for longer than expected
Bank of Russia to offer $50 billion through new FX repos
Russian central bank unveils new measures to boost short-term foreign exchange liquidity in markets, and will offer $50 billion between now and the end of 2016
ECB eases collateral requirements for Greek bonds as borrowing costs soar
European Central Bank says it will reduce the haircut it applies to Greek government bonds, but insists it is not an ‘ad hoc reaction’ to this week’s market stress
BoE’s Weale posits method of overcoming uncertainty
MPC member says studying rates of change can help overcome uncertainty about spare capacity and the natural rate of interest when setting policy
Debelle surprised markets take central banks at their word
Reserve Bank of Australia assistant governor suggests markets are ‘underestimating’ the possibility that central banks will change course in response to ‘unexpected’ data
Belgian review: Common debt will remain ‘taboo’ in Europe
Article published in National Bank of Belgium economic review describes the issuance of common debt as a ‘panacea’ for multiple problems in the eurozone
ECB conference tackles ‘reconciliation’ of statistics as central bank’s powers expand
Senior central bank officials from across Europe discuss the challenge of creating an integrated approach to statistics across monetary policy, financial stability and supervisory functions