Central Banks
Future Fund shifts from equities to cash and achieves above-target return in 2015
Australia’s sovereign wealth fund, the Future Fund, shifted from equities to cash to reduce its risk exposure, senior management say; yearly returns were above target
BoE’s Forbes weighs up varying policy paths in US and UK
Bank of England MPC member Kristin Forbes sees ‘striking’ similarities between the countries’ labour markets, but this does not necessarily mean the same policy is appropriate
Andrew Bailey agrees to lead FCA
PRA chief executive accepts top job at UK’s other financial regulator after being asked to take the role, but may not make the move for some months
National Bank of Belgium closes scientific library
The National Bank of Belgium will close its research library in Brussels in March; diminished need for the facility due to more widespread access to electronic resources, bank says
Carney says supervisors must improve understanding of electronic trading
BoE officials say work is progressing on understanding the risks and impact on ‘system dynamics’ caused by rise of electronic trading, but emphasise it is not all bad
Research analyses Irish banks’ connections to global financial system
An article in the latest Central Bank of Ireland quarterly bulletin maps the networks formed by Irish banks’ connections to each other and to the global financial system
Turkish inflation seen returning to 5% in 2018
Latest projections from the Central Bank of the Republic of Turkey suggest headline inflation will only return to target in 2018, after it overshot October forecasts, rising to 8.8%
Kansas Fed researchers bridge gap between forward guidance data and theory
Working paper identifies empirical effects of guidance at the zero lower bound, before finding a standard model of price rigidity largely replicates the results
Kosovo’s ELA rules are ‘major improvement’, say IMF staff
Central Bank of the Republic of Kosovo adopts regulation setting out the conditions for emergency fund provision; staff at IMF welcome the additional ‘detail and rigour’
Cyprus on track to complete programme by March, finance minister tells MEPs
Cyprus will continue with fiscal discipline and market-orientated reforms once adjustment programme ends, finance minister tells European parliament; rejects ‘tax haven’ claims
Policy interactions may drive global banking contraction, BoE economists find
The combination of unconventional monetary policy and regulation may cause ‘substantial’ spillovers as banks cut cross-border lending, economists including Kristin Forbes find
People: Tombini takes FSB committee chair; Al-Wazir moves to IMF
Alexandre Tombini is appointed to chair budget committee; former PMA governor joins IMF; Kazakh sovereign wealth fund replaces its chairman; and more
South Korea’s new SWF chief sets sights on ‘top ten’
Former World Bank executive director takes office as CEO of the Korea Investment Corporation; sets out desire to grow assets under management beyond $200 billion
Kuroda and Davos panel see little alternative to divergence
Bank of Japan governor warns a synchronised exit from easy policy in the major economies ‘could be worse’ than the ’staggered arrangement’ at present
BIS paper says trade finance impacts global spillovers
Working paper emphasises importance of including trade finance when modelling global shocks, finding variations in price stickiness are important
Reserve accumulation can be inflationary, ECB paper says
Working paper examines the allocation of special drawing rights in 2009 to separate out the inflationary effects stemming from an increase in the monetary base and moral hazard
Banque de France governor wants public reforms
France must cut its public debt and reform its labour market, says Francois Villeroy de Galhau; the governor also calls for new investment products
ECB’s Cœuré calls for new attitude to liquidity
Liquidity in the European banking system should not return to its pre-crisis levels, Benoît Cœuré tells a Davos audience; CMU offers chance to fix problems which caused crisis, he adds
Revised Basel III better reflects bank risk, research finds
Study says 2013 capital rules more in line with actual risk, but can be easily gamed