Economics
Lagarde says QE risks are real, but bubbles are not forming yet
IMF managing director says accommodative policy should remain in place in advanced economies, but clear articulation of an exit strategy will be needed to avoid a repeat of 1994's ‘brutal exit'
MAS deputy highlights Singapore's growing links with the Middle East
Monetary Authority of Singapore's Lim Hng Kiang says cross-border Islamic transactions ‘set to take off’ as more Middle Eastern banks open in Singapore; growth potential ‘yet to be fully realised’
BoE’s Bailey sets out limits to central bank SME support
Andrew Bailey says central bank schemes such as funding for lending are restricted due to the presence of structural market failures
French paper evaluates forecasting strategies
Working paper says a predictive model that combines information sets is capable of outperforming alternative models that combine forecasts; tests models on French GDP data
St Louis Fed president launches new household financial stability research centre
James Bullard unveils new research centre that will focus on understanding links between household balance sheets, the overall performance of the US economy, and stability and upward mobility
New IMF paper finds fiscal consolidation boosts poor country growth in medium term
New VAR methodology leads researchers to conclude that fiscal consolidation hurts low-income countries less, and for a shorter period
Bank of Spain says slump reached ‘nadir’ in 2012
Annual report says recovery is in progress and should continue this year, but depends crucially on continued internal adjustments and the external setting
IMF warns China on rapid growth of social financing
Article IV consultation urges China to tighten prudential standards to rein in fast credit growth and rebalance economy away from investment; growth forecast trimmed again
Bank of Mexico paper backs credit multiplier as amplification mechanism in DSGE
Working paper finds that credit multipliers do produce the amplification effects expected of them in a DSGE model and are not failing as some suggest
Weidmann hits out at 'austerity backlash'
Bundesbank president challenges Blanchard study, says no conflict between fiscal consolidation and growth; Banque de France governor Noyer throws weight behind European banking union
DNB working paper puts forward Eurobonds solution
Proposal would see Eurobonds distributed by an ‘independent budgetary authority' and would be made available depending on a member state's fiscal responsibility as per the Maastricht Treaty
National Bank of Hungary optimistic on SME lending
Hungarian central bank releases latest financial stability report; suggests new funding-for-growth scheme will lead to a recovery in lending this year
BoE opens up its macro models in push for transparency
Bank of England publishes details of its main macroeconomic models as part of drive for transparency prompted by Stockton Review; models to be adapted and developed to eradicate errors
Zimbabwean central bank chief slams ‘reckless’ indigenisation
Gideon Gono asserts his authority over the indigenisation of the country’s banking sector; Standard Chartered still operating despite government threat to withdraw licence
ECB’s Praet calls for European austerity review
Executive board member Peter Praet argues that cuts in government investment are damaging long-term economic growth; calls for protection of the vulnerable against tax hikes
Philadelphia Fed paper investigates price discovery
Study questions how government support can best help kick-start the process of price discovery in a frozen market
Norges Bank paper seeks to solve ‘exchange rate puzzles’
Working paper looks to research into ‘market microstructure’ to explain rapid evolution of foreign exchange markets
ECB paper explores current account reversals
Study finds that some external adjustments are more likely to trigger a current account reversal than others; this is determined by the country’s exchange rate regime
Omani central bank unveils SME measures
All banks operating in Oman will have to allocate 5% of credit portfolios to SMEs; prudential and collateral requirements relaxed to encourage lending
IMF paper searches for deeper insight into the output gap
Working paper proposes method of estimating and decomposing output gaps; inflation found to have low weight
Fed paper investigates decline in US labour market mobility
Study identifies drop in interstate migration since 1980s; attributes fall to stronger internal labour markets rather than demographic or sociological factors
South African paper models international spillovers
Study finds South Africa is a ‘net receiver’ of spillovers from other economies; suggests this is likely to persist as business cycle synchronisation has increased
Taiwan central bank chief sets out priorities for new ADB president
Fai-Nan Perng says new Asian Development Bank head must build on the successes and correct the failings of the institution
European Commissioner defends under-fire Tobin tax
Algirdas Šemeta says the European Commission’s proposal for a financial transactions tax is ‘technically and legally sound’; numerous stakeholders concerned by impact on repo markets