Central Banks
Chile’s economy on sound and stable footing – report
Following earlier action in the year, central bank is unlikely to move interest rates again; growth forecasts revised following copper mine strike
Rwanda approves draft reform of central bank law
Independent members will join MPC and ‘board of censors’ will be abolished
Central banks should test robustness of their main macro models – paper
Bank of Canada paper says users of large-scale macroeconomic models should develop tools to assess whether non-linearities could be distorting results
Book notes: Fed Up, by Danielle diMartino Booth
A “fascinating but annoying” account by a US Federal Reserve insider who openly criticises the culture of the US central bank and policy decisions made by the institution leading up to and following the financial crisis
Trinidad and Tobago scraps 1 cent coin
New coin composition and withdrawal of small denomination expected to save millions; new rounding system will see cash payments made easier
Irish paper examines why banks set collateral conditions
Ex-ante risk and loan size are key factors, researchers say
Riksbank paper studies impact of oil on world business cycle
Researchers find possible solution to macro puzzles by introducing oil shocks into a model of the global economy
Thai central bank sets out timeline for forex reforms
Some regulations are “obsolete”, Thai governor says
BoJ's balance sheet surpasses that of the Fed
BoJ's balance sheet exceeds ¥500 trillion, a fraction larger than that of the Federal Reserve in absolute terms, and much larger as a percentage of GDP
Inflation targeting three decades on
Former RBNZ governor Don Brash reflects on whether New Zealand’s experiment with inflation targeting has worked
More regulation ‘may not fix problematic conduct’, says Sarb’s Mminele
Deputy governor appeals to the entire financial market to challenge and realign current culture; “fundamental shift” needed in order to rebuild “trust deficit”
Central banks build expertise in move to riskier reserve tranches
Growing popularity of reserves tranching is stretching central banks’ capabilities, a new report finds, but they are turning to asset managers and other central banks for help
A regulatory storm hits China
Regulators are making a country-wide push to tighten supervision, in an attempt to pull the Chinese economy away from shadow banking and excessive credit growth
Uncertainty over size of European ‘shadow banks’ – ESRB
Central banks are improving data collection, but many details remain unclear, report says
Fed paper warns on helicopter money risks
Tool appears much less powerful when less realistic elements of the New Keynesian framework are removed; other options could work better, authors say
Inflation is preventing interest rates from rising faster, says Powell
Labour market progress points towards a faster pace of normalisation for the Fed, but below-target inflation is preventing rates from rising above the current “gradual pace”
Balance sheet weakness and falling investment to blame for productivity slowdown – paper
IMF paper rejects structural hypothesis for slowdown in productivity growth following crisis; firms with balance sheet issues and those hit harder by credit tightening cut back on investment
Venezuela’s central bank devalues bolivar as crisis continues
Bolivar devalued 64% in latest currency auction in an attempt to stem effects of financial crisis; Goldman Sachs comes under fire from opposition leader
People: Menon given fourth term; Irish chief economist retires
Singaporean governor awarded fourth consecutive term; Ireland’s chief economist retires, while the registrar of credit unions heads to the IMF; India appoints a new executive director; and more
Surprise RMB strengthening prompts unwinds
"A lot of long [US$] positions were unsustainable and had to be re-evaluated," says forex structuring head
Dombrovskis praises idea of bundling European sovereign bonds
European Commission is “closely following” work on designing new instruments
Financial integration will strengthen region – Thai governor
Santiprabhob says policies need to “converge” in order to create an integrated market; payment systems would be a good place to start with harmonised standards a proven solution, he says
EBA calls for reform of its funding and governance
Funding shortfalls are “unreasonable”, Enria says; some governance arrangements are “overly cumbersome”
BNM’s Ibrahim urges Asia to “re-engineer” global monetary system
Countries should reduce their reliance on the US dollar and promote a “multi-currency market” within Asean, says Muhammad bin Ibrahim