Central Banks
RBI looks to ‘disruptive innovation’ to boost inclusion
Granting licences to 11 payment banks is the next step in a ‘payments revolution’ in India that should increase financial inclusion, deputy governor says, although not all technologies are benign
Canadian deputy says LTV and DTI limits ‘most effective’ macro-pru tools
Lawrence Schembri examines demand and supply factors underpinning rise in house prices; evaluates macro-prudential tools used in Canada and elsewhere
Jin Liqun aims for ‘strong culture’ at AIIB as he is named president-elect
Asian Infrastructure Investment Bank set to be launched before the end of 2015; head of interim secretariat Jin Liqun selected as ‘president-designate’ at meeting in Tbilisi, Georgia
Equity price growth rate ‘leading indicator’ of bank loans, French paper argues
Comparing two models of domestic credit dynamics to recent French data shows the importance of equity price growth rates, according to a Banque de France working paper
Capital controls ineffective at handling policy trilemma, ECB paper finds
Emerging market capital controls have a limited impact on monetary policy trilemma variables and come with spillover effects, the authors warn
South African central bank open to currency intervention
Chinese devaluation stokes fears of further currency falls in economy vulnerable to exchange rate shifts
Inflation targeting should be improved, not replaced, RBA paper says
Rather than a ‘fundamental re-engineering’ of inflation targeting, central banks should adopt a flexible approach that pays some heed to output, authors argue
East African governors say structural measures needed to stabilise currencies
Senior central bank officials from Burundi, Kenya, Rwanda, Tanzania and Uganda identify measures necessary to ensure long-term stability of their currencies
Kazakh central bank moves to stabilise banking sector
Central bank launches plan to compensate depositors hit by collapse in value of tenge, as banks reliant on external funding run into problems
Lockhart still expects rate hike this year
Atlanta Fed president still expects Fed to start tightening ‘sometime’ this year but market expectations of a September hike have fallen
PBoC steps in with rate cuts
Central bank cuts interest rates and reserve requirements amid deepening crisis, and uses the opportunity to push liberalisation agenda
Limited liability distorts incentives for disaster planning, paper argues
Consequences of recent events with catastrophic financial ramifications have been greatly aggravated by policy-makers’ failure to prepare, says ECB working paper
Renminbi ‘fix' lowered as stock market nosedives
Central bank lowers renminbi midpoint value by most since devaluation two weeks ago; some analysts point to decision to halt FX interventions on Monday
Rajan warns banks there will be no more ‘extend and pretend’ on NPLs
Banks need to face the fact that large chunks of their assets are non-performing, and the RBI will no longer prop them up via a policy of forbearance, governor says
Strategic default helps explain crises in advanced economies, ECB paper finds
Sovereign debt and financial re-allocation are linked by the use of government bonds as collateral on the interbank lending market, paper notes
Carney asked to review MPC code
Andrew Tyrie asks BoE governor to review MPC code of conduct and ensure it prevents committee members from having, or appearing to have, a conflict of interest
BIS researchers dissect emerging market fire sales
Working paper picks apart the channels through which asset management impacts on emerging bond markets, finding evidence of procyclical behaviour
East African countries top Brookings table on inclusion
Study by think tank in Washington, DC, evaluates inclusion efforts in 21 diverse countries; Kenya, Rwanda and Uganda achieve high scores across categories
Iranian central bank should not recover assets, US government argues
The department of justice has argued in a submission to the Supreme Court that Iran’s central bank should not recover $1.75 billion in assets awarded to the families of terrorism victims
RBA paper finds distribution matters when assessing impact of wealth effects
Example of car buying highlights how different households adjust consumption in response to housing wealth effects, although channels remain unclear
Russian governor seen dissuading private sector from large dollar holdings
Russian central bank governor Elvira Nabiullina reportedly joined prime minister Dmitry Medevev in telephoning banks and major export companies about their holdings of dollars
RBNZ deputy defends change in mortgage ‘speed limit'
Concession allowing 5% of new mortgages to exceed LTV ratios will not add fuel to market rally that has seen Auckland house prices rise by 24% in past year, deputy governor says