Monetary Policy
ECB’s LTROs had ‘favourable effect’ on sovereign yields
Dutch working paper evaluates the impact of the ECB’s unconventional monetary policy; says LTRO had beneficial short-term effect on government borrowing in most distressed eurozone countries
Turkish central bank steps in to calm forex markets
Capital outflows have prompted Turkey's central bank to purchase local currency in a bid to smooth ‘market volatility'; move seen as signalling a failure of the bank's 'Reserve Option Mechanism'
Asmussen defends ECB bond purchases at German constitutional court hearing
German representative on the European Central Bank’s executive board Jörg Asmussen rejects charges the central bank exceeded its legal basis by agreeing to purchase the sovereign debt of eurozone nations
Brazil central bank faces contradictions in global economy's 'new reality'
The Central Bank of Brazil resorts to forex intervention, as it finds itself fighting a weakening currency alongside weak growth and inflation straining at the top of its target band
Polish paper compares MP committees' efficiency
Paper finds MPCs became less efficient following the crisis, though the ECB and BoE have been quick to recover; says academics and central bankers make most efficient members
Cœuré says ECB has no re-distributive mandate
'Distributional consequences of monetary policy are temporary, unintended, and with the view of safeguarding price stability,' ECB board member says in a speech today in Vienna
Swedish deputy says monetary policy must remain as tool for dealing with financial imbalances
Per Jansson says macro-prudential policies will only complement, and not replace, the Riksbank’s use of its benchmark interest rate to lean against financial imbalances
Navigating an exit from accommodative policy is ‘an art and not a science’
Participants at CEPR forum debate the challenges central banks must deal with when withdrawing unconventional policies; some express concern over rising asset prices
Fed researchers find little QE impact on emerging market capital flows
Discussion paper finds Fed’s quantitative easing has not had a statistically significant impact on net capital flows to emerging markets, although behaviour changed post-crisis
'Furious' jobs increase boosts Bank of Canada’s Poloz
Statistics Canada reports increase of 95,000 jobs in May; Poloz uses first speech in role to call for economic rebalancing and issue warning over low inflation
Japan government pension fund re-jig could see BoJ pick up $80bn in JGBs
Japan’s sovereign welfare fund signals could sell up to ¥8 trillion worth of domestic bonds; BoJ could potentially absorb them as it seeks to drive up the country’s monetary base
IMF paper explores link between low interest rates and bank risk-taking
Working paper finds banks take more risks in low short-term interest rate environment; more so if they are well capitalised
ECB keeps SME measures ‘on the shelves’ and holds rates alongside BoE
Draghi says further unconventional measures were discussed at today’s meeting of the governing council, but are being held in reserve; ECB joins Bank of England in taking no policy action
Reserve Bank of Australia holds rates as exports drive growth
RBA decides against further cuts, as exchange rate converges on terms of trade and exports drive economic growth
Latvia to adopt euro in 2014
European Commission gives Latvia the green light to become eighteenth eurozone member after it comfortably meets convergence criteria, but ECB voices concerns over price and financial stability
Fischer gives high marks to Bernanke and Draghi
Outgoing Bank of Israel governor Stanley Fischer believes the world owes a great debt to Fed chairman Ben Bernanke and praises ECB president Mario Draghi; says Israel can live with side effects of QE
Bank of Israel’s outgoing chief, Stanley Fischer, on the challenges of central banking
Stanley Fischer believes his work as governor of the Bank of Israel is done. He tells Chris Jeffery about the reform process in Israel as well as the challenges facing the world economy and the IMF
Price stability ‘pivotal’ in shaping exchange rate pressures
Bank of Finland discussion paper analyses pressure on exchange rates during financial crisis; says countries that experienced high inflation beforehand were hardest hit
Brazilian currency must adapt to 'new reality', says deputy governor
Talk of an end to Fed QE is creating a 'new reality' for other currencies, as capital begins to flow back to the US; BCB will intervene if it sees the real diverging from a basket of currencies
Croatian governor cautious over banking union
Boris Vujčić says Croatia will adopt the euro "as soon as possible" after it joins the European Union next month; raises concerns over banking union and ECB’s lack of supervisory experience
Caruana warns of yield curve 'global steepening'
BIS general manager Jaime Caruana says central banks must consider the effect on global bond markets of rising rates and shrinking balance sheets
Pianalto says financial regulation should learn from monetary policy transparency
Financial regulation can benefit in the same way as monetary policy has from transparency and forward guidance, says Cleveland Fed president Sandra Pianalto
BoE reveals £300 million drop in FLS lending
Banks participating in FLS scheme reduced their net lending by £300 million in the first quarter of 2013; Bank of England predicts ‘gradual’ increase throughout year
Kansas City Fed article finds markets anticipated QE announcements
Article in the Federal Reserve Bank of Kansas City’s latest economic review says that markets foreshadowed changes in asset purchase programme; may have affected long-term interest rates