Central Banks
Slovenian bail-in was legal, ECJ rules
Decision to wipe out some subordinated debt before recapitalising Slovenian banks in 2013 was challenged, but court finds it is compatible with EU law
Mortgage interest tax deduction can increase market volatility – DNB paper
Making interest payments on housing loans tax-deductible can raise the debt levels of households and their chances of default, and increase housing market volatility in response to outside shocks
FSB calls for more progress on risk-free reference rates
The FSB says authorities have made progress towards reforming reference rate methodologies, but says they must continue to develop alternatives to the existing main reference rates
IMF’s Lipton argues for greater economic inclusion in South Africa
David Lipton urges reforms to remedy the fact that one-third of the working population is “effectively excluded” from the economy; suggests policies to build confidence and lift growth
Beyond banking: ESRB wants wider macro-prudential toolkit
European Systemic Risk Board argues for providing policy-makers with macro-prudential instruments extending to all forms of credit; lays out specific short- and long-term actions
BoE’s Woods sees merit in multiple policy committees
New deputy governor believes MPC and FPC should remain separate; BoE has to make sure each committee is aware of the impact of their actions on other committees, he says
Temporary price changes affecting inflation more – BoJ paper
Working paper explores how frequent micro-level price changes can be reconciled with macro-price stickiness; temporary price changes happening more, and increasingly in one direction, authors say
Tighter mortgage lending rules proposed in New Zealand
Central bank looks to crack down on investor lending with high loan-to-value ratios, while tightening the rules for most loans to owner-occupiers; new tools also on the table
EBA proposes new templates for AT1 issues
EBA releases draft templates for future issuance of Additional Tier 1 capital instruments, highlighting provisions it ‘would recommend avoiding’
Nepal Rastra Bank pushing banks to focus on rural areas – governor
Inclusion is a key part of Nepal’s five-year financial development plan, Chiranjibi Nepal says, and the central bank has plans to encourage banks to spread from urban to rural areas
Turkish central bank steps in to calm markets in wake of coup attempt
Central bank promises banks unlimited liquidity as failed coup sends shockwaves through markets; economists say banking sector is holding up so far but has some vulnerabilities
Bank of Italy sees Brexit having little impact on country
Commercial and financial links between Britain and Italy are much more limited than other European countries, argues the Bank of Italy in its latest economic bulletin
People: Uzbekistan appoints new deputy; Ahmed retiring from IMF
Shohruh Shoahmedov promoted to deputy chairman; IMF’s Masood Ahmed announces retirement; BoE’s Paul Fisher to chair London Bullion Market Association
Bank of Israel opens payment protocol to smaller players
Central bank removes obstacle to new firms looking to enter payments market; also working on ‘payment systems directive’ based on European model and new access standards
BoE’s Weale sees demand weakening more than supply
Martin Weale thinks short-term impact of UK vote more likely to drag on inflation than boost it; will also weigh impact of exchange rate movements and earnings developments in August meeting
Rajan sees bright future on inclusion but stresses work to be done
Outgoing governor of the Reserve Bank of India discusses different approaches open to policy-makers and some common challenges; unified payment interface effective in a ‘few weeks’
Credit, liquidity and collateral versus more intermediation
Richard Heckinger examines the costs and benefits of complex financial market infrastructure regulations, including the impact of new layers of intermediation
ECB publishes guide to its macroeconomic projections
European Central Bank publishes guide to how its staff research and publish their regular projections for the eurozone economy; gives details of models and tools used
Atlanta Fed president wants to ‘let the picture clarify’
Dennis Lockhart likens the UK’s vote to leave the EU to a storm that has “clouded the economic waters”; the Fed must be patient in the aftermath, he says
Payments forum moots ‘layered’ architecture in UK
New layered strategy would help improve agility of payments infrastructure, consultation suggests; trade association says changes will need to be implemented in line with regulation
EBA says European banking supervision practices are converging but some areas lag
European banking supervisors achieved considerable cross-border convergence in some areas in 2015, but other fields retain differences, EBA report says
East African governors praised for balancing act
Central bank heads in region have “done extremely well”, Kaberuka says; panellists at Bank of Uganda event debate central bank mandates and role in development
RBNZ can evaluate forecasts using benchmarks – McDermott
Inflation has been weaker and the NZ dollar stronger than the central bank forecast, assistant governor says; can gain insight from comparing its forecast with others
Shirai urges BoJ to change course
Former policy board member says the Bank of Japan’s current policies are not sustainable, recommending a rethink of policy mix and communication strategy