Central Banks
Surpluses of Germany and China feed global imbalances, BIS research finds
Bank for International Settlements paper compares current account and creditor positions of Germany and China, finding Germany’s surpluses to be more resilient in the face of the global financial crisis
FSB flags up financial reform concerns
Financial Stability Board reports on progress of financial reforms to G-20 leaders; details the ‘serious problems’ emerging in some areas of national policy implementation
Fed minutes ‘significantly affect’ US asset prices
New York Fed economic policy review finds that US asset price volatility increases when the Fed releases minutes from policy meetings, but less so since FOMC has become more transparent
ECB holds rates as Draghi is ‘caught between doves and hawks'
ECB sticks to forward guidance as eurozone recovery deemed too 'green' to warrant a tightening of policy; announcement is imminent on the single supervisory mechanism
Fed presidents opposed as September meeting nears
John Williams backs reducing asset purchases ‘later this year’ while Narayana Kocherlakota says the Fed should be providing ‘more stimulus… not less’
Customers of failing banks less likely to trust other people
DNB working paper says mistrust prompted by experience of crisis increases likelihood of bank runs and undermines long-term growth
Implicit government guarantees leads to increased risk-taking at banks
Fed discussion paper argues that strengthening market discipline by reducing bank complexity is needed to address moral hazard
Riksbank holds rates as IMF sees ‘sizeable' risks at Swedish banks
Interest rates held at 1% as Swedish central bank attempts to support growth without adding to household debt stock; IMF Article IV report frets over large and vulnerable financial system
BIS economists find Fed's QE helps curb tail risk perception
Paper published today finds the effect of the Fed's announcing unconventional monetary policy measures is strongest when used in conjunction with forward guidance on low interest rates
BoE and BoJ shun further easing as economic activity picks up
Both the Bank of England and Bank of Japan keep their interest rates and asset purchases unchanged as their respective recoveries work up a head of steam
NY Fed staff say effect of policy changes depend on risk environment
New staff report argues that macro policy announcements affect asset prices to different extents depending on the existing economic outlook; when risk is elevated, the impact is reduced
Haldane says central banks have ‘further to go’ to improve communication
Bank of England executive director Andrew Haldane says policy-makers are still searching for a language that resonates with the general public
Central banks are getting more transparent, study finds
Study conducted by Barry Eichengreen and Nergiz Dincer finds trend towards greater transparency was not knocked off course by the financial crisis; independence, however, is more patchy
RBI's Rajan sets out vision for ‘inclusive development'
India's new central bank governor hits the ground running, outlining several concrete policy measures ranging from a short-term forex swap window to national savings instruments
IMF paper considers impact of China’s capital account liberalisation
Researchers suggest that reduced capital control will likely lead to net outflows from equity and bond markets as domestic investors look to diversify
New York Fed paper wary of higher inflation targets
Staff report finds that pursuing a higher trend rate of inflation would likely create a ‘more volatile and unstable’ economy and unseat inflation expectations
European Commission launches shadow banking onslaught
Commission looks to impose more stringent liquidity and capital requirements on money market funds; industry body hits out at 'ill-considered' proposals
Weidmann slams Europe's stability pact relaxation
Exceptions made for four members of the eurozone earlier this year were inappropriate, Bundesbank president says; making the rules more binding is the only way to stronger monetary union
Bank of Finland deputy calls on Denmark and Sweden to join the SSM
Pentti Hakkarainen says a strong Nordic dimension in the European banking union would benefit all countries involved; Sweden focused on domestic supervision for time being
BIS papers study effects of monetary and fiscal policy shocks
Researchers find fiscal shocks within the eurozone lead to a real exchange rate appreciation through inflation differential; monetary policy shocks have minor impact on commodity prices
East African central banks take different approaches to rising inflation
Bank of Uganda hikes key rate by 100bp to 12% as food shortages push crop prices up by 16% in August; Central Bank of Kenya dismisses own inflationary pressures and holds rates
ECB's Cœuré defends OMTs in Berlin speech
Executive board member tells German audience that OMTs do not remove the incentive from governments to reform, and says risk transfer within the monetary union is unavoidable anyway
German voters want to keep the euro - but not to save it, poll finds
Two-thirds do not believe the next chancellor has mandate to support eurozone countries financially after the September 22 elections; a third supports break up of eurozone and return to deutschmark