Central Banks
IMF paper shows US monetary conditions impact EM leverage
Impact is more pronounced for firms that are dependent on external financing, authors find; sample shows financial conditions have the ability to influence borrowing constraints
Macedonian notes: world’s first security thread in long window
New designs entering circulation feature De La Rue’s Kinetic StarChrome; central bank also begins withdrawal of the D5,000 note
RBI paper unpacks India’s non-performing loan troubles
Authors find bank risk-taking is procyclical and the level of non-performing loans responds to the interest rate environment and the overall growth of the economy
SNB’s Jordan stresses commitment to exchange rate intervention
Central bank holds the policy rate, but the Swiss franc is still “significantly overvalued”, and the SNB will continue to intervene, chairman says
IMF delay forces National Bank of Ukraine to keep forex controls
Central bank to leave foreign exchange controls in place until political instability subsides and reforms are under way; IMF acknowledges progress, but says more is needed before the third review
BoJ and ECB collaborate on distributed ledger tech
The project will examine the possibility of running central bank infrastructure platforms in a DL environment; research will focus on payments and securities settlement
Inflation to reach 2% target in next six months, BoE says
MPC votes unanimously to leave rates unchanged at 0.25%; exchange rate appreciation suggests smaller overshoot of inflation target than previously forecast
Greek negotiations turn acrimonious amid debt relief freeze
ESM freezes debt relief measures for Greece, accusing government of breaking spending promises; European Commission’s Moscovici hits back at IMF criticism
Book notes: Shadow banking in China, by Andrew Sheng and Ng Chow Soon
The authors dispel many myths about shadow banking in China – but may underestimate future risks, writes Michael Taylor
People: Fed appoints head of financial stability; Russian deputy to gain new adviser
Lehnert gains financial stability role after proving influential in the department’s creation; former head of financial stability appointed to advisory role at Bank of Russia
FOMC signals hawkish outlook as it hikes
Dot plot shifts upward and projection implies members expect further hikes in 2017; Janet Yellen says fiscal stimulus “not obviously needed”
Non-linear shocks create asymmetric policy impacts – paper
Bank of England working paper shows a shock to mortgage spreads has more of an impact on the real economy during periods of recession, with implications for policy
BoE’s Woods: firms favour ‘transitional’ Brexit period
Prudential Regulation Authority chief quizzed on best course of action for financial firms during Brexit process; “preferential” market access is not necessary, but seems sensible, he says
Task force launches climate disclosure recommendations
Mark Carney says better information will allow investors to “back their convictions with their capital”; Mary Schapiro says businesses will take the lead, even if politicians will not
Sama unveils new banknote designs with updated features
Six denominations to feature new security thread and improved features for the visually impaired; new coin design also launched by Saudi central bank
Bank of Ireland’s Cronin spells out Brexit process for insurance firms
“Hearts and minds” have to be in Ireland, says director of insurance supervision; 2017 will reveal the “reality” of Brexit, she says
Netherlands paper exposes differing capital flows across EMU
Paper examines the mechanism behind divergence of north and south eurozone members, as capital flows caused external imbalances to move in opposite directions
US agencies reject Wells Fargo resolution plan
Bank faces further curbs on its activities if it cannot present the Fed and FDIC with a sufficiently improved plan by early 2017
Central banks working to overhaul data-sharing
IFC report finds many central banks are seeking ways to better share micro data, both internally and externally
FCA urges progress on equivalency for derivatives trading
US and EU regulators should base recognition decisions on outcomes, not technical details
Venezuela removes largest banknote amid contraband concerns
Government authorises removal of 100 bolivar bill to combat “mafias”; nation also closes border with Colombia amid “economic war”
IMF paper links Chinese growth to ‘drastic increase’ in inequality
Rapid growth in recent decades linked to rising economic inequality, with consumption and income inequality co-moving closely
Updated Bank of Mauritius survey questions people on inflation causes
Latest survey shows Mauritian stakeholders are wary of external factors; exchange rate was viewed as second most important factor under new question format
Economic growth on the horizon for Finland, says Liikanen
Improved productivity and higher employment are needed to boost economic growth, says Finnish governor; Bank of Finland’s forecasts show recovery will be slower than in previous cycles