Central Banks
Jackson Hole: ECB and NY Fed economists examine ideal operational frameworks for policy
Simon Potter praises paper by ECB’s Ulrich Bindseil for in-depth analysis, but also highlights a number of areas for further research
Jackson Hole: economists flag costs and benefits of bloated balance sheets
Economists including Christopher Sims, Ricardo Reis and Jeremy Stein unpack the economics of central bank balance sheets, identifying both dangers and potential benefits
Interest rates to remain flat for longer period of time – Chile minutes
It might be necessary to “postpone” normalisation of monetary policy, latest minutes from Central Bank of Chile show; interest rates to stay at 3.5% for “prolonged period” of time
Basel Committee warns on potential missed deadlines
A “significant number” of Basel standards still need to be translated into domestic regulation as deadlines loom; problems with risk-weighted asset variability and inconsistency continue
Bundesbank places first representative in Africa
South Africa is “fertile ground” for investment, says Andreas Dombret; Jenny Kilp to be placed in Pretoria to help foster projects between Sarb and Bundesbank
BoE deputy clashes with academics over use of leverage ratio
Shafik disagrees with paper that argues leverage ratio “harms” pass-through of monetary policy – leverage ratio is “here to stay” says deputy governor
Yellen: future policy-makers may need new tools to tackle recessions
Fed chair says equilibrium rates may not be high enough for rate cuts to deal with all eventualities, so US policy-makers may need to think more laterally about their options
Turkish central bank to conduct ‘extensive studies’ into inflation dynamics
Central Bank of Turkey on the hunt for price stability; bank looking to foster joint effort in improving structural factors
Financial inclusion in Rwanda rising, central bank report says
ATMs and mobile money has helped reduce the number of those financially excluded, governor says; banking sector starting to benefit but high proportion of NPLs in some sectors is a concern
FSB looks to halt correspondent banking decline
Board says it is working on filling data gaps, clarifying regulatory demands and building local capacity as signs point to a sharp decline in parts of the world
Signs of ‘de-anchoring’ inflation expectations in eurozone – ECB paper
Study finds professional forecasts are paying more attention to ECB inflation projections and less to the target; authors suggest “extensive use of forward guidance” could help
Inflation to fluctuate around bottom of target range, Botswanan report says
Mid-term review paints optimistic picture for inflation in Botswana; loose monetary conditions to contribute to growth in economic activity
King calls for IMF revamp
Former BoE governor suggests replacing IMF’s executive board with International Monetary and Financial Committee; notes fund may have strayed too far into political territory
Book notes: The power of a single number, by Philipp Lepenies
Lepenies offers a brief but very readable treatment of GDP's political history, drawing out some important lessons in the process
Bank of Zambia begins liquidating three financial institutions
Commercial Leasing Zambia, Cetzam Financial Services and Genesis Finance to close with immediate effect; those affected have 30 days to file objection to the courts
Unconventional monetary policy should be supported on structural and fiscal fronts – ECB paper
Authors examine the effects of supply- and demand-side policies; results point to “positive synergies” between policies
Anticipation effects can make lower bound a self-fulfilling prophecy – BoJ paper
New Keynesian model implies an economy can be drawn on to the zero lower bound more quickly when people expect it; negative rates have only a small impact on duration
Economic outcomes will “vindicate” central bank – Malawi governor
Chuka asks the private sector to “trust” the central bank in its policy decisions; a reduced debt-to-GDP ratio and an end to drought should see inflation fall, he says
Property prices closing in on pre-crisis levels – BIS statistics
Statistics for the first quarter show advanced economy prices approaching levels last seen before the financial crisis, but emerging markets see a dip; research links house prices to credit conditions
RBI launches bond market shake-up
Host of measures aim to develop markets, increase participation and improve liquidity in Indian capital markets, following review by former deputy governor Harun Khan
Capping interest rates could affect credit, says Kenyan president
Kenyan President approves new banking law despite acknowledging future “difficulties”; government to monitor possible emergence of “unregulated” and “informal” lending mechanisms
Book notes: Priests of prosperity: how central bankers transformed the postcommunist world
Juliet Johnson has produced an interesting account of how central banks in former communist regimes were developed at a time when they had little or no experience of modern financial systems
UBS teams up with other major banks in blockchain venture
‘Utility settlement coin’ to be backed by cash held at central banks; team of experts will keep an “open dialogue” with the banks and regulators throughout the testing process
Frontier markets need framework to strengthen capital flow resilience – IMF paper
Frontier markets are affected by capital flows in similar ways to emerging markets, the paper argues, suggesting a change in the “landscape” of capital flows could have policy implications