International
Adrian and Rey: macro-prudential tools needed to resist ‘bad booms’
Economists say monetary policy cannot fully control local conditions; Hélène Rey calls for improved early warning models
Balance sheet features impact global spillovers – NY Fed paper
International research effort finds banks’ business models affect the extent to which policy spills across borders
Fed paper examines financial spillovers of US monetary policy
Authors find that conventional and unconventional policies create different spillover effects
NY Fed paper measures global capital flow pressures
The authors’ method allows them to estimate how sensitive countries are to changes in global risk aversion, as well as overcoming problems with capital flow data
BoE paper sheds light on global policy transmission
Comparison of UK and Hong Kong based on bank-level data finds evidence of both portfolio and funding effects
Fed’s Powell: normalisation will be ‘manageable’ for emerging markets
Fed governor says current capital flows appear to be in line with fundamentals; corporate debts a vulnerability but “situation is not alarming”
Fed policy has had bigger impact on global liquidity since 2009
A 25bp rate cut causes a cross-border lending growth to rise of two percentage points, versus 0.8 before the crisis, researchers find
Caruana urges rethink of global co-operation
Closer co-operation across economic policymaking could help to dampen the backlash against globalisation, BIS chief says
Global liquidity matters for pass-through – CBRT research
Access to external sources of liquidity affects pass-through of monetary policy, researchers find
Archive – EMU: a sceptical US view
Allan Meltzer of the American Economic Association explains why he is worried about a union by the back door; first published in November 1997
Archive – Interview: Allan Meltzer
Robert Pringle talks to Allan Meltzer, Carnegie Mellon professor and chair of the US Congress’s International Financial Institution Advisory Commission (the “Meltzer Commission”); first published in February 2003
“What would Allan say?”
Central Banking Publications founder Robert Pringle finds pearls of wisdom in his email correspondence with the late Allan Meltzer
Stanley Fischer analyses the factors behind low real interest rates
The economist emphasises government policy uncertainty in the US regarding health care, regulation, taxes and trade, as well as higher savings and weak investment
BNM’s Ibrahim urges Asia to “re-engineer” global monetary system
Countries should reduce their reliance on the US dollar and promote a “multi-currency market” within Asean, says Muhammad bin Ibrahim
IMF expands access to disaster funds
Economies are offered more generous thresholds for funding in the face of severe natural disasters
Extended monetary easing in US has larger impact abroad – paper
IMF paper examines the impact of periods of prolonged monetary easing on risk-taking behaviour; leverage ratio and other measures of vulnerability increase
HK researchers ask how much markets affect RMB fixing
Researchers test China’s assertion the exchange rate is now determined more by markets, finding mixed evidence
Politics now driving markets more than central banks – BIS review
“Precipitous decline” in correlations implies markets no longer in thrall to central bank policy; US dollar credit still on the rise despite MMF reform; tensions in Chinese markets
BIS paper tracks US and eurozone QE spillovers
Shadow rates approach helps authors show US QE spilled across borders more strongly, though impact differed between countries
Cross-border claims shifting in favour of non-banks
BIS international banking statistics show claims on banks fell in third quarter of 2016 but claims on non-banks continued to grow
Book notes: The International Monetary Fund: Distinguishing Reality from Rhetoric, by Graham Bird and Dane Rowlands
The book brings valuable rigour to bear in assessing the work of the IMF, but suffers from a reliance on ageing data in many places, says Jacek Klich
Turkish central bank acts to support lira as inflation jumps
Central bank launches fresh measures to counter “unhealthy price formations”; inflation surprise in December adds to pressure for monetary policy action
New data sheds light on policy spillover channels – BIS paper
Expanded data published by the BIS show how US dollar, euro and yen affect cross-border lending flows
BIS: markets less beholden to central bank action
Political shocks appear to have jolted markets into a more healthy state, but it is not yet clear if this is the start of normalisation or a temporary phase