Central Banks
Italian paper looks at effects of Basel leverage ratio on repo and refinancing
A move to higher leverage ratios by eurozone banks has not decreased their repo and refinancing activities, a Bank of Italy paper says
Irish central bank announces new protections for mortgage borrowers
Variable-rate housing loan borrowers must be informed of cheaper alternative mortgages and have rate rises explained to them by lenders
Turkish central bank to meet with investors under new comms practices
Central Bank of the Republic of Turkey announces string of new communication practices that will see it meet with wider range of stakeholders
EBA publishes final draft of IRB assessment methodology
The EBA publishes the final draft standards by which European regulators will assess banks’ compliance with the rules on using internal models to judge capital adequacy
Inflation expectations are part of QE transmission mechanism – BoE paper
Firms’ inflation expectations increase in response to QE, research finds; interventions played ‘modest’ role in stabilising inflation expectations in recent years
ECB paper compares ability of indicators to predict bond risk premia
Researchers assemble 132 macroeconomic indicators and compare their performance against financial measures as predictors of eurozone countries’ bond risk premia
BoE prize-winning research favours CCB over leaning against the wind
Authors from Lancaster University find credit spread-augmented Taylor rule damages welfare, while a recent BIS paper takes a different analytical approach
Draghi raises possibility of ‘public backstop’ for NPLs
Eurozone recovery is continuing with credit conditions and volumes increasing because of quantitative easing, Draghi says; backstop would be “very useful”, but require Commission support
South Korean governor calls for international swap line expansion
Lee Juyeol welcomes improvements in financial safety nets at both global and regional levels, but suggests more co-operation is needed to ensure they expand further
Atlanta Fed paper demonstrates signalling mechanism in mortgage market
Lenders in mortgage market able to reveal quality of loans by delaying trade, authors find; loans sold five months after origination less likely to default
Sarb hiking cycle is paused, not stopped, governor stresses
South African Reserve bank delays further tightening in wake of more favourable inflation outlook; governor insists it is a ‘pause’ and should expectations change the MPC would act appropriately
MasterCard strikes deal to acquire UK’s VocaLink
Agreement to gain controlling stake in retail payments firm will end ownership by major UK banks; regulator to discuss developments
Mongolia governor replaced two years before end of term
Bayartsaikhan Nadmid, chairman of the supervisory board of the National Agricultural Co-operative Federation, takes over leadership; departing governor had two years left to serve
Indian reserves climb to $360.2bn at end-March
Reserve Bank of India’s latest report on reserve management shows 2.8% increase over six months; two-thirds of foreign currency assets invested in securities
RBNZ signals action ‘likely’ amid New Zealand dollar strength
Stronger than anticipated NZ dollar threatens ability to hit inflation target, RBNZ says; announcement triggers drop in currency
MAS announces ‘firm regulatory actions’ against multiple banks
Monetary Authority of Singapore finds “control failings” at DBS, Standard Chartered and UBS as part of probe into 1MDB funds; US Department of Justice seeking to recover $1bn in assets
‘Digital sterling’ could bring benefits but would reshape banking – BoE’s Broadbent
Bank of England deputy says central bank digital currency could entail a redesign of the banking system; research points to potential growth and stability benefits
RBI deputy praises Indian payment and settlement systems
R Gandhi notes the ever-increasing volume handled by state-of-the-art systems, but stresses the need to ensure they are safe and “result in overall efficiencies”
Monetary policy in Sweden needs to remain expansionary, Riksbank board says
Bank’s inflation forecasts are "sensitive" to international factors; executive board notes strengthening of economic activity
Growth risks push Mauritius MPC to cut by 40bp
Central bank cuts interest rates to 4%, amid risks arising from Brexit and potential volatility from US elections; reducing rate will support investment and encourage growth, says bank
Money illusion may not be irrational – BIS paper
Claudio Borio and Anna Zabai suggest people’s attachment to a unit of account is not simply a failure to think in real terms, with implications for the effectiveness of negative rates
Andrew Bailey wants well understood FCA mission
The Financial Conduct Authority has statutory objectives and publishes an annual business plan, but there is “not a lot in between”, he says; new chief wants to run the institution “effectively and tightly”
BoE agents see firms aiming for ‘business as usual’ in wake of Brexit
Agents’ post-Brexit review shows housing market resilience while there are reports of some firms look to relocate back to the UK in wake of sterling depreciation; IMF updates forecasts