Central Banks
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
Central Bank of Iceland changes course with 50bp cut
Reversal of tightening cycle reflects concern inflation is not rising as expected, in part because of the strength of the króna; growth still forecast to continue above trend
RBI’s Mundra hopes to boost credit to small businesses
Deputy governor outlines “ABCD” of issues affecting small businesses’ ability to access credit, including better access to information and new forms of collateral
Tightening policy during slowdown is not ideal, but necessary – Sarb governor
More fiscal or monetary stimulus will not generate growth in South Africa, says Kganyago, who instead stresses inflation outcomes need to be lowered
Gibraltar to launch polymer £100 note
New note will be the first polymer banknote for Gibraltar; De La Rue to use ‘Safeguard’ substrate for new banknote, which will be issued “soon”
Mervyn King on Brexit, crisis supervision, economic rebalancing and reforming the IMF
The former Bank of England governor discusses Brexit, radical regulatory reform, the difficulties rebalancing the European and global economies and an overhaul of the International Monetary Fund
Canadian working paper examines effect of downward nominal wage rigidity on wage growth
Average wage growth higher due to DNWR after recession, authors note; signs of heterogeneity in DNWR effects
People: Irish market supervisor quits; Emefiele appointed president of AACB
Gareth Murphy resigns as head of market supervision at the Central Bank of Ireland, Nigerian governor appointed president of African Association of Central Banks, and more
Economists add to theory and empirics of economy’s non-linear dynamics
Paper by Bank of England economists finds “strong evidence” of non-linearity in UK data, while Markus Brunnermeier and Yuliy Sannikov expand theory of financial amplification mechanisms
Overhaul of Federal Reserve structure is needed, paper says
Former adviser to Bernanke co-authors paper stressing need to end private control of 12 regional Fed banks; diversity and transparency need improvement, authors argue
RBNZ’s Wheeler stands by inflation targeting
Despite a host of challenges for central banks, flexible inflation targeting remains the “most appropriate” framework for New Zealand’s monetary policy, governor says
Capital outflows look manageable as Iceland moves to lift controls – central bank
A “stress test” of potential outflows implies the Icelandic financial system and central bank reserves will cope when capital controls are lifted; the government bill prepares to release funds
Book notes: The euro and the battle of ideas, by Markus K Brunnermeier, Harold James and Jean-Pierre Landau
The authors have produced a fascinating and informative book that offers suggestions on how differences in beliefs can be overcome