Operating framework
IMF staff urge oil-reliant countries to strengthen liquidity frameworks
Low oil prices likely to harm liquidity, raising the need for improved facilities and forecasting; risk of delayed surge in non-performing loans
Kocherlakota: Fed should talk openly about negative rates
Former Minneapolis Fed president says central bank should talk about its policy options in a recession ahead of time, to avoid sending a bad signal if they have to be used
Strong anti-inflationary monetary policy helps mitigate uncertainty shocks, Italian paper says
Central bank has better chance of mitigating uncertainty-driven recessions by following Taylor rule with high weight on inflation, paper finds
Iceland expands policy framework with capital flow tool
Central bank embraces idea of monetary policy dilemma, not trilemma, imposing reserve requirements on certain types of capital flows into the economy
Central Bank of Argentina raises reserve requirements
Argentina raises reserve requirements as it continues to fight high inflation; bank will introduce inflation-targeting regime in September
Pursuing stable rates may create instability, Norges Bank paper finds
Preference among central bankers to keep rates at “normal” levels may prove time-inconsistent, researchers warn
Bank of Jamaica lowers inflation target
Jamaica's central bank continues move towards inflation-targeting regime; bank forecasts inflation to fall within new target band by the end of the fiscal year
Iceland prepares for offshore króna auction
Date set for major step towards lifting capital controls, as holders of offshore króna are offered chance to swap currency, albeit at punitive rates
Lagarde: Kazakhstan central bank needs clear mandate
Floating the currency was "just the beginning", IMF chief says; urges update of monetary and fiscal policy frameworks
Riksbank’s Skingsley sees potential in helicopter money
Small, open economies will have limited room for manoeuvre if global real rates stay low, so central bankers should be willing to consider more radical options, deputy says
IMF staff encourage central Asian economies to overcome ‘fear of floating’
Even in economies with supposedly free-floating currencies, central banks have a hard time resisting the urge to intervene, IMF report says
Bank of Canada review explores inflation target renewal
Four articles consider various elements of the central bank’s inflation targeting framework; one charts growing influence of nominal wage rigidity on average wage growth
Philippines announces new rate corridor
Central bank will introduce new lending and deposit facilities in June, with interest rates set either side of a lower policy rate
Syrian central bank slashes exchange rate as currency pressure grows
Central bank allows sharp depreciation of currency and adopts more flexible approach to setting peg, clamping down on black market trading
ECB paper presents evidence of risk-taking channel in US
Working paper finds interest rates affect the quality of bank credit in the US; researchers exploit confidential data on banks’ internal ratings of loans
Turkey vulnerable to sudden stop, IMF warns
Central bank action on rates, operating framework and reserves would help shore up the country’s weak external position and tame inflation, fund says
Trilemma, dilemma, and the PBoC's primer for the 'new normal'
Hui Feng argues the PBoC faces a dilemma not a trilemma – but the effort of balancing the two goals is painful all the same
BoE assumes control of interest rate benchmark
Central bank to take responsibility for overnight benchmark, planning to broaden the transactions underpinning its calculation; WMBA to retain role in calculating and publishing figures
Advanced economies could learn from EM counterparts in managing balance sheets, paper says
Composition of advanced economies' balance sheets is aligning in some respects to their EM counterparts, largely as a consequence of increasing size since the financial crisis, paper says
Operational reform has not impacted longer term rates, BoE working paper says
Reserve averaging and reserve targets reduced volatility in overnight rate but had little impact on longer-term rates, research finds
Summers: Fed is not ready for next crisis
Secular stagnation has left Federal Reserve short on firepower as the next recession looms, economist says; urges greater willingness to risk inflation overshoot and action by fiscal authorities
BIS’s Shin argues bank capital underpins both monetary policy and financial stability
Research sheds light on tension between bank shareholders and wider society, as high levels of capital support lending and therefore affect the real economy as well as the financial sector
Reserve Bank of India modifies liquidity framework
Rajan spells out plans to “progressively lower” the liquidity deficit in the banking system as part of a broader shift in focus; RBI cuts policy rate by 25bp with inflation on track
West African union must improve monetary transmission, IMF staff say
The West African Economic and Monetary Union must increase the effectiveness of monetary policy, IMF staff say; reforms should target bank refinancing and government securities markets