Monetary Policy
IMF backs counter-cyclical fiscal activism in times of crisis
Fiscal stimulus had powerful effects in the wake of the financial crisis, but monetary policy is better suited to keeping the economy on an even keel in normal times, says IMF
RBA looks to exchange rate
The Reserve Bank of Australia keeps the door open for further rates cuts but emphasises that a weaker currency ‘would be helpful’ in boosting demand
A sad ending to Summers versus Yellen
The politicisation of the debate over who should be the next chair of the Federal Reserve may be a sign of the times, but it is a sad day for central banking, argues Thomas Cargill
Near-zero interest rates of limited help to non-financial firms
BIS quarterly review article finds that lesser pass-through is partly related to higher premium for risk required by financial intermediaries
Central Bank of Russia simplifies interest rate policy
New measures will streamline the interest rates that the central bank targets; changes brought in two days after the appointment of a new deputy governor for monetary policy
RBI sets up committee to make monetary policy ‘transparent and predictable'
Reserve Bank of India announces make-up and mandate of committee commissioned by new governor Rajan to overhaul the way the central bank conducts monetary policy
Hungary council members divided over rate drop
Central Bank of Hungary monetary council members were split over the size of last month’s rate cut; minutes from August meeting signal that easing cycle is winding down
Economists criticise ‘incomplete’ Bank of England guidance
Richard Barwell and Jagjit Chadha criticise the Bank of England for failing to lay out the path back to a more neutral monetary policy in its attempt at forward guidance
Dallas Fed highlights transformation of FOMC statements over past 20 years
Before 1994, markets were left in the dark over interest rate changes; statements have expanded seven-fold in the past 20 years, reflecting the evolution of monetary policy operations
Turning forward guidance into 20:20 vision
The Bank of England’s vision of forward guidance is incomplete and could shake confidence in the central bank’s policy framework.
Carney defends Bank of England’s forward guidance
Bank of England governor defends use of state-contingent forward guidance despite bond market reaction; concern rises about mixed policy message
Asia-Pacific central banks shed light on future policy
Bank Indonesia hikes rates; Reserve Bank of New Zealand says it will likely tighten policy in 2014; Bank of Korea looks to buck emerging market trend and keep rates low as inflation drops
ECB calls for action as ABS market reaches ‘crossroads’
European Central Bank’s monthly bulletin calls on other institutions to help kick-start the market; suggests ABS transactions could be guaranteed in an attempt to boost SME lending
Bank of Russia names G-20 summit co-ordinator as first deputy governor
Ksenia Yudayeva takes over as one of four 'first deputies' from Alexei Ulyukayev, who was made an economics minister earlier this year
Asmussen: Eurozone governors should ‘withstand' pressure of public minutes
ECB executive board member Jörg Asmussen says eurozone central bank governors should be able to withstand the pressure of having their deliberations and voting made public
Bank of Mexico deputy welcomes QE taper
Manuel Sánchez singles out downshift in yield curves pushing domestic interest rates for different maturities to all-time lows as the biggest effect of lax monetary conditions on emerging economies
San Francisco Fed president warns asset price bubbles are ‘here to stay’
John Williams discredits economic theory on asset price movements; says bubbles are inflated predominantly by expectations of future price increases
ECB pushes banks on ABS reporting
European Central Bank raises the reporting bar for banks looking to use securities backed by SME loans as collateral; sets October deadline for more detailed disclosure
IMF paper says ageing populations are dampening impact of monetary policy
Working paper says monetary policy is becoming less effective in advanced economies undergoing demographic shift; calls for policy-makers to adapt
US jobs data disappoint raising doubts over September taper
Unemployment fell to 7.3% in August, but modest improvement in jobs data eclipsed by big negative revisions of June and July figures; analysts split over how numbers affect Fed's decision to taper QE
G-20 leaders vow co-operation to avoid monetary policy spillover
St Petersburg summit sees IMF concede advanced economies are now the major engines of global growth; European banking union is a top priority in the G-20's joint ‘action plan'
FOMC policy rate guidance pushes up US equity prices
Netherlands Bank research paper finds policy rate guidance also leads to significant reduction in implied volatility for US government bonds
Fed minutes ‘significantly affect’ US asset prices
New York Fed economic policy review finds that US asset price volatility increases when the Fed releases minutes from policy meetings, but less so since FOMC has become more transparent
ECB holds rates as Draghi is ‘caught between doves and hawks'
ECB sticks to forward guidance as eurozone recovery deemed too 'green' to warrant a tightening of policy; announcement is imminent on the single supervisory mechanism