Central Banks
Bowles: Give ECB its ‘smoke and mirrors'
ECB's chief inquisitor says central banks must retain 'a certain amount of mystery' to keep fiat monetary systems going; interaction between ECB's monetary and supervisory arms will be 'difficult'
BoE’s Tucker sketches ‘richer’ capital accord
Paul Tucker gives a vision of what an ideal capital accord might look like in future including greater use of CoCos and longer-term debt; stresses this would still not remove the need for supervision
BoJ minutes show concern over bond market pressure ahead of QE taper
Members at the May meeting of the Bank of Japan’s policy board agreed on the need for a ‘flexible’ approach to bond purchases as fears over the end of QE in the US push up long-term rates
National Bank of Austria vice-governor faces bribery charges
Wolfgang Duchatczek and eight others charged with bribery in connection with note-printing deals with Syria and Azerbaijan
National Bank of Belgium urges care in use of credit conditions surveys
Analysis shows eurozone’s Bank Lending Survey and Belgium’s Survey on Credit Conditions contain useful information – but ‘crucially’ depend on model specification
ECB is capable of negative rates - but consequences are uncertain
ECB executive board member Yves Mersch says dangers include financial innovations to ‘emulate currency and allow tax avoidance' if deposit rates are moved below zero
BoE deputy Paul Tucker quits after 33 years
Deputy governor for financial stability will stay for Mark Carney's first few months as governor of the Bank of England, before leaving to spend a ‘period of time in academia in the US'
NALM Americas 2013: Panellists play down expectations of QE wind-down
Central bankers think it unlikely the US Federal Reserve will wind down its quantitative easing programme – but some acknowledge an exit could hit emerging markets hard
Bank of Canada reins in risk concerns
Review of Canadian financial system finds risks from European sovereign debt crisis and Canadian housing market are retreating; special report says collateral demand is ‘manageable’
Shirai says Bank of Japan’s communication has ‘room for improvement’
Board member explains reasons for dissent in recent monetary policy meeting; says Outlook Report is unclear in some places and misleading in others
Israel's Fischer says he used casting vote to avoid ‘signs of a crisis'
Outgoing Bank of Israel governor regrets his MPC never outvoted him, but feels recent moves to stem the shekel's rise have met with success
FDIC chief economist highlights factors behind community bank failure
Richard Brown says community banks play a ‘crucial role’ in the US financial system; presents research identifying common factors behind those that failed during various financial crises
Riksbank paper looks at scrapping inflation target in favour of nominal GDP
Working paper concludes the inflation target should not be dropped, but only outperforms nominal GDP targeting when forward guidance is given
Bank of England paper says above-target inflation threatens expectations anchor
Article in latest quarterly bulletin says UK inflation expectations remain anchored for time being but could be dislodged if high inflation persists
Asia-Pacific: Financial stability concerns reflected in rate decisions and forex intervention
Indonesia leans against higher inflation expectations with rate rise, RBNZ's Wheeler concerned over ‘rapid' house price inflation, and Bank of Thailand attempts to slow baht's downward slide
ECB’s LTROs had ‘favourable effect’ on sovereign yields
Dutch working paper evaluates the impact of the ECB’s unconventional monetary policy; says LTRO had beneficial short-term effect on government borrowing in most distressed eurozone countries
UK banks on cyber threat alert, says BoE’s Haldane
Chief risk officers at UK banks worried about cyber-attacks on financial institutions; Bank of England official says government must take ultimate responsibility to guard against cyber threats
Canadian paper proposes new DSGE model for analysing credit shocks
Working paper proposes new model that accounts for the effects of defaults on both households and banks; finds the probability of a company defaulting rises with its leverage ratio
UK mulls US-style bank stress tests
Bank of England seeks to improve bank stress tests by including publicly disclosed remedial actions as debate intensifies over independence and the use of a leverage ratio in the UK