Central Banks
Book notes: Phishing for phools, by George Akerlof and Robert Shiller
The veteran economists’ study of the traps markets create for unwitting consumers ultimately ends up doing exactly what the authors caution against
Lagarde only candidate for IMF top job
Executive board says Lagarde the only person put forward during nomination period, which closed yesterday; selection process to be completed ‘as soon as possible’
Riksbank cuts to new low, despite signs of overheating
Central bank pushes policy rate 15bp deeper into negative territory even as economy moves close to full capacity; board responding partly to policy easing abroad
BoE’s Cunliffe wants more detailed timetable for European reforms
Bank of England deputy governor welcomes ambition and honesty of five president report, published in June; hopes to see more detail on dates in future
Central Bank of Brazil faces ‘policy dilemmas’
Tombini facing tough challenge as inflation rises into double figures while the IMF predicts deeper recession; observers divided on what comes next
Danish economists test measure of systemic risk
National Bank of Denmark paper uses ‘SRISK’ measure to assess systemic risk in the Danish financial sector, finding it was a good predictor of banks that needed bailing out
People: Mozambique deputy moves to airline; Mervyn King joins Aston Villa FC board
Bank of Mozambique deputy moved from central bank to national airline; former BoE governor joins premier league team board of directors; and more
Yellen says Fed unsure about legal issues surrounding negative rates
Fed chair tells Congressional committee she sees no reason why the Fed could not cut below zero if need be, but legal issues have not been ‘fully investigated’
Research compares borrower-based macro-pru tools
Debt service-to-income caps generate ‘less pronounced macro feedback’ in the short term than loan-to-value limits, working paper finds
BoJ moves to ‘ease stress’ in JGB market
More generous limits applied to securities lending facility designed to alleviate strains in the market for government bonds, though liquidity indicators do not show clear signs of tightening
Bank recapitalisation is a ‘powerful’ policy instrument, paper suggests
Economy likely to remain in an ‘anaemic state’ until certain conditions met, research says; bank recapitalisation more effective than fiscal expansion in encouraging aggregate demand
Monetary policy does not ‘persistently impact’ bank lending, paper finds
Working paper published by Central Bank of Cyprus examines the impact of interest rate changes on both lending and credit risk
Research considers impact of fiscal consolidation on debt-to-GDP ratio
Working paper published by ECB finds fiscal consolidation conducted through a revenue increase, rather than a spending cut, is ‘self-defeating austerity’
Canadian deputy warns limits to macro-prudential tools may impact monetary policy
Timothy Lane says fiscal policy may have to step into the breach and provide stimulus when using monetary policy would risk creating ‘vulnerabilities’ macro-prudential policy can’t offset
NZ has ample space to respond to risks – IMF staff
An International Monetary Fund staff report says there is room to ease monetary policy further if need be, while authorities should prepare more prudential measures
RBI report lays ground for trading new derivatives
Working group proposes allowing new interest rate options in India to improve financial institutions' ability to hedge interest rate risk
BoE’s Cunliffe: UK may be close to debt sustainability limit
Deputy governor says analysis of recent UK credit cycle suggests rises in debt may leave the economy vulnerable; Cunliffe would consider action if debt-to-GDP ratio rises
China relaxes QFII limits amid calls for capital controls
FX regulator shortens ‘lock-up’ period, during which foreign investors must wait before repatriating funds, from one year to three months