Central Banks
Colombian paper analyses impact of bank size and risk on policy transmission
Commercial banks with less credit risk on their books can ‘maintain a relatively good growth in the supply of credit’ when faced with a monetary policy shock, research finds
IMF sees deflation threat to Western Balkan recovery
Special report on economic transition in Western Balkans identifies deflation spilling over from eurozone as risk to recovery in the region; most of the countries experiencing negative inflation
Colombian paper finds structure matters in modelling oil shocks
Working paper finds evidence that the impact of an oil price shock on an oil-exporting country such as Colombia can be large, but depends on the structure of the economy
BIS paper says liquidity regulation should not replace lender of last resort function
Lender of last resort and liquidity regulations perform separate roles, and therefore one cannot replace the other, working paper says
VAR limits: dislocations put focus on other lines of defence
Dislocations in the Swiss franc and the US Treasury market have highlighted the limitations of standard regulatory capital models, but banks insist their other lines of defence are up to the task
Fisher says goodbye to ‘honourable tradition of central banking’
Dallas Fed president delivers last speech before standing down; talks about the value of public service and praises his colleagues for work at the Fed and ‘for the love of the thing itself’
Sri Lankan governor takes aim at central bank procedures
Arjuna Mahendran stresses value of ‘credible procedures for decision-making’ and warns the central bank has a ‘long way to go’ in that regard; predecessor faces public scrutiny
RBA research sets out stress test for households
Model emphasises dangers of relying on aggregate measures of household indebtedness when assessing financial stability and setting monetary policy
EBA offers advice on determining ‘critical functions’ in resolution
Technical advice seeks to clarify EU resolution directive in setting out exactly which parts of a bank are essential for financial stability; bank resolution plans found to be lacking in some areas
Poland publishes forecasts behind ‘final’ rate cut
Economics Institute within central bank lowers forecast for inflation in 2015 to -0.5%, down from 1% in November; MPC says last week’s cut ‘concludes’ its easing cycle
EU exit not disastrous to UK investors, Lamont says
The former Conservative chancellor says fears of financial turmoil in the UK after an EU withdrawal are exaggerated
BoE draws lessons from Thomas Piketty
Income inequality has the potential to destabilise both financial and real sectors, and is increasingly garnering attention from central bankers, as the BoE’s quarterly bulletin highlights
Research considers effects of delaying fiscal consolidation on GDP
Working paper published by the IMF finds there are no ‘substantive gains’ to be had in GDP from delaying consolidation if multipliers are constant
Ingves lays out toolbox at Riksbank’s disposal
Swedish central bank governor says he ‘will do more if necessary’ to fight deflation, arguing ‘there are several ways to make monetary policy more expansionary’
Richmond Fed paper analyses new banks decline
If the rate of new banks continues to fall, it will have a large impact on the banking sector as well as the flow of credit in the economy, according to research published by the Richmond Fed
Central Bank of Honduras revises inflation target to 5.5%
After signing an economic agreement with the IMF last year, and in consideration of lower oil prices, the Central Bank of Honduras has adjusted its inflation target for 2015 by 50 basis points
US banks hold up under Fed stress tests
Latest annual stress tests show 31 largest bank-holding companies would lose $490 billion under the Fed’s severely adverse scenario, which has been tightened compared to 2014
RBA mulls creation of repo CCP
Australia currently lacks a CCP for clearing repos, which could be exacerbating systemic risk and impairing market functioning, but previous efforts met with little enthusiasm
Spanish deputy favours ‘moral persuasion’ in supervision
Fernando Restoy believes supervisors should have the ‘ability to influence the decisions’ of the managers of the entities it oversees through ‘moral persuasion’
British minister brands Argentina’s new Falklands banknote a ‘stunt’
The Central Bank of Argentina has issued a new 50 peso banknote featuring the Falkland Islands, which sparked criticism, with a British minister branding it a ‘stunt’
FSB-Iosco tweaks systemic shadow bank definition after criticism
Initial proposals for identifying systemic ‘non-bank non-insurers’ ran into criticism last year, with asset managers complaining rules put too much emphasis on size