Monetary Policy
IMF paper finds less tail risk in immediate aftermath of QE
IMF working paper finds ‘strong evidence' that unconventional monetary policy led to a reduction in market uncertainty, in turn contributing to an easing in financial conditions
Fed struggles with same issues as 100 years ago, says Lacker
There has been a debate over which assets the Fed should hold since its founding in 1913, Richmond Fed president Jeffrey Lacker says
Tough tests ahead as Rajan prepares for RBI top job
Raghuram Rajan holds many of the skills required to govern the RBI, but he will face substantial monetary policy, governance and financial stability challenges, a new Central Banking article finds
Prasarn hails prudent policies allowing Thailand to weather storm
Thailand's international reserves have meant the central bank has not had to raise interest rates to prop up the currency, says governor; hails ‘credible' monetary policy for ‘fostering growth and stability'
Decline in expected real interest rates 'key' to Japanese growth
Kikuo Iwata says inflation expectations will raise aggregate demand through the transmission mechanism of lower real interest rates; calls change in public mindset key to policy success
Indonesia raises rates in unscheduled meeting to rescue the rupiah
Bank Indonesia raises interest rates in attempt to slow the fall in the value of the rupiah; observers fear the move will hit economic growth
Bank of Brazil hikes rates for the fourth time in as many months
Brazilian central bank deploys primary monetary policy weapon in a bid to hold back inflation and open another front to support the real, following intervention in the currency markets
Canada deputy says QE exit may be ‘more benign’ than critics fear
Despite Canada’s close ties to the US, Bank of Canada deputy governor John Murray believes tapering of Fed asset purchases will have less of a negative impact than many pundits fear
Rajan faces daunting challenges as he takes over as RBI governor
Raghuram Rajan faces a raft of monetary policy, governance and financial stability challenges when he takes over as governor of the Reserve Bank of India next week, writes Hugh Sandeman
Carney's BoE walks fine line between stimulus and financial stability
Bank of England governor Mark Carney’s maiden speech includes announcement of relaxation of bank liquidity rules; insists the central bank is in charge of interest rates, despite market moves
Bank of Jamaica will continue to tighten liquidity conditions
Governor Brian Wynter says central bank will keep on issuing ‘special securities’ to ensure exchange rate stability; unconcerned by recent increases in inflation rate
Forward guidance successful in mitigating downside risks to price stability
Provision of time-based forward guidance reduces downside price stability risks but may result in upside risks during the medium term, finds ECB working paper
Kuroda believes QQE has started to ‘exert effects’
Bank of Japan governor Haruhiko Kuroda says the radical easing plan unveiled in April has led to a ‘favourable turn’ in the country’s finanical markets, public expectations and economic activity
Jackson Hole speakers question viability of central bank co-operation
BoE deputy Charlie Bean says it is not ‘viable’ for advanced central banks to internalise the spillovers from their monetary easing; academics argue co-operation could create extra costs
Israel central bank reinstates September meeting due to market volatility
Bank of Israel reverses a decision not to meet around the Jewish new year; u-turn likely to have been influenced by market expectations that the Fed will begin to 'taper' next month
ECB research highlights Greenspan’s powers of persuasion
Researchers say Alan Greenspan was a ‘dominant’ chairman of the FOMC who frequently managed to convince regional Fed presidents to walk his own policy line
Lagarde tells central bankers not to 'rush to exit' on QE
Speaking at Jackson Hole, the head of the IMF said unconventional monetary policies were "still needed in all places it is being used" and that it was unclear what "exit" actually implied
Economists weigh Fed exit at Jackson Hole
Robert Hall warns against tightening policy too soon; Arvind Krishnamurthy lays out exit path that would see Fed selling its Treasury portfolio while maintaining its purchases of MBS
Central bank independence in the spotlight as Indonesia joins EM currency ‘panic'
Bank Indonesia joins central banks in Brazil, India and Turkey in taking unconventional steps to stem currency sell-off; concern emerging markets are targeting currencies over inflation
Sarb looks to rein in money market liquidity
South African Reserve Bank concerned that high levels of liquidity could threaten the monetary policy transmission mechanism; plans to drain excess cash over a number of years
Norwegian paper explores financial stability trade-off
Working paper identifies trade-off between increasing rates to mitigate financial imbalances and lowering rates to reduce the risk of bank insolvency
Czech paper dissects central bank inflation reports
Researchers find the inflation reports produced by a sample of eight central banks are ‘generally of good quality’ but warn their analytical power cannot be taken for granted
Fed contemplates change to forward guidance
Minutes from the FOMC’s July meeting show members were divided over the outlook for the US economy, and on the prospect of tinkering with the Fed’s forward guidance
Norges Bank deputy backs Bayesian econometrics in policy-making
Jan Qvigstad highlights how Bayesian econometrics have been used to develop two of the central bank’s ’most important’ forecasting tools