Central Banks
Fiscal stimulus works even in debt-driven recessions – Cleveland Fed paper
Study uses defence spending to estimate fiscal multiplier, finding it is higher in areas with larger debt burdens, contrary to the fears of some economists
Federal Reserve Board seeks comms boost with Facebook page
Fed adopts its fifth form of social media in an effort to reach a greater audience, joining many other central banks expanding their communications in a similar direction
CFTC charges Deutsche Bank with reporting code violations
US regulator files legal complaint against Deutsche Bank for swap reporting violations; complaint is latest blow to German giant’s US operations
MAS looks to overhaul payment systems
City state already has access to some of the world’s most advanced payment systems, but cash and cheque use remains high; MAS hoping to improve governance, regulation and technology
RBNZ better at forecasting growth and inflation than exchange rate, notes study
Economists compare judgement-based forecasts with benchmark set by suite of statistical models, finding judgement tends to work well, but both types of forecast struggle with exchange rates
National Bank of Denmark sells stake in cash-handler BKS
Central bank official says organisation succeeded in ending spate of violent robberies, so there is no longer a need for the National Bank to be involved
FOMC minutes show divisions on monetary policy
Kansas Fed president Esther George voted for an immediate rate rise at the FOMC meeting in July; other members were also hawkish but some preferred to keep monetary policy loose, minutes show
Regulations gave eurozone banks incentives to downplay credit risks, paper argues
Bank of Slovenia paper analyses whether banks correctly assessed corporate borrowers’ creditworthiness before the financial crisis, and what incentives they faced
Definitions matter when using DTI ratios – Riksbank paper
How regulators define debt and income can affect the outcome of financial stability analysis and the use of macro-prudential tools, authors say
Data gaps hamper work on emerging market vulnerabilities – BIS paper
Large debt stocks, particularly in foreign currencies, point to vulnerabilities in some emerging markets, but gaps in the data are hampering analysis, BIS economists say
Mongolia’s central bank raises rates 450bp in bid to stop currency slide
Rate hike was prompted by fall in currency’s value since late June; central bank says it continues to see encouraging trends in currency flows
FSB fleshes out guidance on resolution
Reports add detail on emergency funding needs for global banks and maintaining the continuity of critical services during resolution; most standard-setting work expected to be finished in 2017
RBI’s Mundra says banks must evolve or face extinction
Deputy describes “dismal future” for banks, saying they must embrace a socially responsible approach if they are to avoid the threat posed by fintech firms and other non-banks
Bullard backs new approach to forecasting
Idea of economy converging to a single steady state has “likely outlived its usefulness”, St Louis Fed president says; instead reserve bank will now focus on regime-based forecasts
RBI should improve link between analysis and macro-prudential policy – FSB review
The Reserve Bank of India should consider regular financial stability meetings to set policy, and it needs to support its decisions with deeper analysis, a peer review finds
Long-run financial market volatility has strong effects on real economy, researchers say
A Bank of England working paper presents a method for breaking financial market volatility into long- and short-run components; long-run volatility closely linked to economic fundamentals, authors say
Belarus central bank reports ‘significant’ credit risk to country’s banking sector
A large proportion of Belarusian banks’ risky debts are owed as a result of financing government, central bank says; report echoes IMF call for major reforms to state-owned enterprises
Korea needs right kind of banking competition – quarterly bulletin
Competition can harm welfare if it is focused on gaining market share through a price war, authors say; Korean system may benefit from greater diversity
Malaysia’s Ibrahim proposes audit enhancements
Bank Negara Malaysia governor says audit faces new challenges and should cover broader risks, while expanding its scope to include “strategic auditing”
Japanese researchers model success and failure of international cooperation
Various factors can lead to cheating on global monetary policy cooperation, paper published by the BoJ finds – but careful design can help the agreement hold up
Atlanta Fed president ‘not prepared to rule out’ further rate rise this year
Despite “troubling” headline GDP growth figures, “final real sales” figures point to US economy maintaining momentum and heading for third-quarter growth, Dennis Lockhart says
NBIM’s Q2 returns hit by Brexit turbulence
Second-quarter returns of 1.3% held back by European equities and UK in particular; real estate investments register second negative quarter
Goldfajn faces independence test
Ilan Goldfajn has abundant technical skills required to run Brazil's central bank. But he could face similar political pressures as his predecessor at a troubled time for the Brazilian economy.