Monetary Policy
ECB researchers find evidence for ‘bank liquidity risk channel' for monetary policy
Non-standard policy at the ECB and the Fed has lowered bank funding volatility and increased the supply of loans, acting as an additional channel of monetary policy transmission
Challenges remain despite 'calmed' markets, says National Bank of Austria
Financial stability report published on Monday shows Austrian growth stalled in the second quarter of 2012 following a concurrent decline in demand for bank loans and a tightening of credit standards
Cœuré says banking union vital to avoid a ‘lost decade' in Europe
Europe must act to break the sovereign-bank nexus and deal with zombie banks if it is to avoid a Japan-style decade of stagnant growth; backs ECB monetary policy to work toward this objective
Euro bank lending conditions were ‘softened’ ahead of crisis, ECB paper shows
Authors also found evidence of excessive risk-taking for mortgages loans
Central Bank of Turkey in aggressive move to defend lira
Central bank sells between $1.5bn and $2.5bn worth of foreign exchange, its highest ever amount in one day, in an effort to halt a slide in the value of the lira
Bank Russia to become ‘mega-regulator' with mandate for growth
New law set to be enacted in September will hand the central bank responsibility for almost all of Russia's financial system, and give monetary policy a broader mandate to support ‘sustainable growth'
Carney's BoE shifts towards forward guidance on rates
Bank of England holds monetary policy steady, telling markets that expectations of rate rises have been premature; formal forward guidance is expected at the August meeting
IMF paper highlights weak monetary transmission mechanism in Vietnam
Vietnam has suffered from higher inflation than other Asian economies over the past five years – despite comparable growth rates
Finance sector balance sheets vital for monetary policy transmission, IMF paper shows
Balance sheet effects are comparable in magnitude to the traditional interest rate channel in transmitting monetary policy, say IMF researchers
ECB commits to keep interest rates down
Governing council says interest rate will remain at or below 0.5% for an ‘extended period of time’ despite previously refusing to pre-commit monetary policy
RBA governor optimistic economy can negotiate end of investment boom
Glenn Stevens says the Australian economy is facing ‘interesting times' but the right mix of prudent policies and frameworks can give the country ‘confidence for the future'
Sweden's Riksbank holds rates, but new deputy dissents
Ingves suggests the possibility of another increase in mortgage risk-weights after they were raised to a minimum of 15% in April; Riksbank estimates consumer price inflation to remain at 1% in 2013
Carney prioritises 'women on banknotes' issue
New Bank of England governor says issue of present and future female representation on banknotes is under discussion; pledges further public announcement by end of July
Portuguese paper questions efficacy of fiscal policy at zero lower bound
Working paper finds that government and private consumption are substitutes when the nominal interest rate is at the zero lower bound; this reduces impact of fiscal policy on output by a third
Chile central bank warns of volatility on US QE withdrawal
Latest monetary policy and financial stability reports say economy and banks remain on the right track, but ‘tapering' from the US Fed could cause volatility in the Chilean financial markets
Israeli paper examines price-setting behaviour
Research finds that consumer prices in Israel are ‘moderately sticky’ and only change every 6 to 9 months; finds inflation expectations impact pricing behaviour more than actual inflation
Mark Carney era underway at Bank of England
Expectations are high the new Bank of England governor will introduce forward guidance; academics point out he will first need to win over a divided MPC
Impact of yen depreciation on Asian trade ‘not all that simple’, says BoJ board member
Weaker yen could benefit Japan's Asian trade partners due to cheaper 'intermediates', says BoJ’s Shirai
Top Fed officials speak out to calm markets
Two Federal Reserve governors and the New York Fed president emphasise a change in monetary policy will be driven by data, not the date; further easing remains a possibility
Fed's Stein clarifies unemployment ‘threshold' for rate change
Permanent FOMC voter seeks to provide extra clarity over Bernanke statement last week; emphasises that interest rates could stay at rock-bottom even if unemployment falls to 6.5%
IMF plans overhaul of assistance to central banks and governments
Policy paper lays out plans for ‘single strategy’ combining technical assistance and training; pilot programme for new Capability Assessment Program aims to improve monetary and fiscal policy
Hungarian inflation bound for 3% target after central bank cuts again
Hungarian National Bank cuts benchmark interest rate by 25bp for 11th successive meeting; forecasts that inflation will pick up in 2014 and hit target the following year
Caruana backs Bernanke taper timetable but warns banks to prepare for volatility
BIS general manager says Fed chairman Ben Bernanke was right to signal a tightening of monetary policy but warns stress tests will be needed to prepare banks for an increase in volatility
ECB paper considers how to conduct monetary policy without interest rates
Occasional paper studies development of Islamic finance in Europe, including the difficulties inherent in setting monetary policy given that sharia bans interest rates