Central Banks
Dollar strength behind breakdown in economic paradigm, says Shin
BIS head of research points to failure of covered interest parity post-2008, with the strength of the US dollar correlated with the size of market anomalies
Japanese inflation target a partial success – Fed paper
Authors show adopting inflation target during a liquidity trap can have powerful effects, but in the Japanese case it seems to have been weakened by other factors
IMF staff urge oil-reliant countries to strengthen liquidity frameworks
Low oil prices likely to harm liquidity, raising the need for improved facilities and forecasting; risk of delayed surge in non-performing loans
Kocherlakota: Fed should talk openly about negative rates
Former Minneapolis Fed president says central bank should talk about its policy options in a recession ahead of time, to avoid sending a bad signal if they have to be used
Czech National Bank to launch second supervision department
Consumer protection and ‘retail distribution’ supervision to be moved under a new department dedicated to supervision, the second of its kind; Ladislav Kročák to become executive director
ECB paper considers impact of loss in collateral value
Research examines how a loss in value will impact the wider economy by studying the effects of a legal reform in Sweden in 2004; sees potential for ‘negative consequences’
External factors most important inflation driver, Mauritius survey shows
Inflation expectation shows 71% of stakeholders asked believe external environment is most important factor in inflation pattern; exchange rate viewed as second most important
Rajan sidesteps question on RBI future
Reserve Bank of India governor says decision on second term will be reached after discussion with government; RBI holds policy rate at 6.5% after inflation surprise
Hungarian governor launches lawsuit against politician
Hungary's governor launches defamation lawsuit against Socialist law-maker over alleged accusations of misuse of central bank funds by foundations
No room for complacency despite ratings stability, Sarb’s Myburgh says
South African Reserve Bank to help support credit rating through delivering on price stability and protecting and enhancing financial stability, financial markets head says
Strong anti-inflationary monetary policy helps mitigate uncertainty shocks, Italian paper says
Central bank has better chance of mitigating uncertainty-driven recessions by following Taylor rule with high weight on inflation, paper finds
Menon encourages Chinese companies to explore offshore
Managing director of MAS considers connectivity between China and South-east Asia; suggests corporates recycle capital through securitisation
Sri Lankan central bank defends governor expenses
Central bank incurs around $663,000 in travel expenses in 2015 as governor and central bank staff attend a number of international financial meetings
Searching for excellence in central bank communication
First-class performance of modern central banks requires first-class communication
Yellen upbeat but concerned by weak jobs data
Janet Yellen expects continued progress to Fed’s objectives; says latest labour market report is “concerning” but warns against reading too much into it
ECB paper considers impact of banking shocks on Portugal
Researchers examine impact of different types of credit supply shock on the Portuguese economy from 2005 to 2013; shocks to large banks may have had large impact on total investment
European Supervisory Authorities launch joint website
Joint committee of three European Supervisory Authorities launches website; European Commission proposes extending remit to three more countries from within the EEA
Hitting inflation targets may be harder now, thanks to lower bound – paper
Working paper warns of potential for lower bound episodes to affect expectations of when they will occur in future, something that can act as a drag on inflation in the present
Iceland expands policy framework with capital flow tool
Central bank embraces idea of monetary policy dilemma, not trilemma, imposing reserve requirements on certain types of capital flows into the economy
Cambodian central bank says $8 million grant will boost retail payments
National Bank of Cambodia announces grant from South Korean government to help develop payments infrastructure; hoping to discourage cash usage and support inclusion
State money and bank money: lifting the fog around QE
Steve Hanke says economists are missing important details by focusing on interest rates, rather than the money supply
US jobs report puts Fed hike expectations on ice
Small increase in non-farm payrolls leads market to all but write off prospect of a rate hike later this month; Lael Brainard and Eric Rosengren keen to see more data
Beware the bond price snapback, says BIS’s da Silva
Poor understanding of inflation drivers and possible disequilibrium from ultra-low rates mean emerging markets should not get too comfortable, says deputy general manager
Divergent monetary policies are top concern for reserve managers in 2016
Reserve managers view divergent monetary policies among the world’s top central banks as the most pressing challenge they face in 2016; asset and currency diversification continues