Central Banks
RBI’s Acharya says India ‘urgently’ needs asset management company
New deputy governor says stressed assets must not be allowed to “fester”, sketching two possible designs for an asset management company
Mexico steps in to stabilise forex market
New derivatives contracts will be available to all credit institutions, with the first auction scheduled for March 6; a total of up to $20 billion will be allocated, central bank says
Broad sectors of Irish economy are ‘very connected’ – study
Irish research uses network analysis to look at sectoral linkages
Europe must strengthen money-laundering controls – EU agencies
Firms fail to properly implement AML/CFT policies, two-thirds of European national regulators say
Carstens agrees to stay at Bank of Mexico until December
Following a meeting with the Mexican president and finance minister, the governor will stay until end-November; BIS board approves the arrangement with general manager Caruana to stay until December
Sri Lankan governor appears before inquiry into alleged fraud
Critics allege malpractice involving firm owned by former governor’s son-in-law; local media report officials also worried by severe drought
BoE unlikely to predict next financial crisis, says MPC member
BoE MPC members grilled by MPs in forecasting models and past errors; Vlieghe says current models are just not good enough
New legislation to grant BoE more power over payments infrastructure
BoE’s Bailey details consolidation of core retail payment infrastructure along with UK central bank’s new powers
Uncertainty about momentum in the labour market – RBA minutes
“Mixed” picture in Australian labour market shows unemployment increasing alongside full-time employment; spare capacity likely to persist “for some time”
People: Riksbank’s Nessén takes on new advisory role; Albizu retains CMCA chair
Riksbank’s head of monetary policy takes on new board advisory role; Dominican governor reappointed by peers to serve as the CMCA’s chairman for another six years; and more
New deposits backed by central bank money could solve public mistrust
New deposits backed by central bank reserves could address public fears about bank safety following the use of bail-in tools in the resolution of regional banks, argues Alessandro Roselli
Market discipline stems Level 3 asset manipulation – paper
Bank of England paper shows link between low capital ratios and Level 3 assets between 2008–2013, but market discipline moderates the impact from accounting discretion
Nigeria’s central bank rolling back forex restrictions
Allocation rules are scrapped under the new regime, while all forex dealers must open outlets at airports to aid travellers; additional forex is to be made available for tuition and medical expenses
Banks fear fresh burden from new EU branch supervision plan
EBA insists enhanced supervision of largest branches will not bring additional requirements
IMF warns Bank of Mongolia against fiscal financing
Latest round of funding contingent on central bank making changes, mission chief says; support provided to help government deal with bond default, but fiscal changes must be made
ECB’s Cœuré argues against protectionism
ECB board member says protectionist policies reduce overall growth potential; calls for a more “efficient, enduring and equitable” approach to globalisation
Tech-related mismeasurement not to blame for 2004 slowdown
Fast growth between 1995 and 2004 is the “anomaly”, the authors suggest; further productivity growth is expected when the potential of latest advancements is realised
Fed’s Mester says public should not hold policymakers to ‘unrealistic account’
Monetary policy cannot and should not be used to spur productivity growth, says FOMC member; unwinding of Fed’s mortgage portfolio may help guard it against calls to enter the realm of fiscal policy
Why the EU needs an asset management company
The European Banking Authority’s Piers Haben and Mario Quagliariello argue a well-designed asset management company should be a major part of efforts to clean up the European banking sector
FOMC sentiment effects tested with ‘computational linguistics’
Economists find sentiment conveyed by FOMC statements affects policy expectations, inflation, and industrial production
Kuroda flags need for better network of emergency forex liquidity
Bank of Japan governor warns network of swap lines among major central banks may not be enough as systemic banks reach into a broader set of regions
Seychelles to demonetise old 100- and 500-rupee notes
Improved security features need to be “put to best use”, says the central bank; the general public have until June 29 to spend or exchange the old banknotes