News
Central banks should test robustness of their main macro models – paper
Bank of Canada paper says users of large-scale macroeconomic models should develop tools to assess whether non-linearities could be distorting results
Trinidad and Tobago scraps 1 cent coin
New coin composition and withdrawal of small denomination expected to save millions; new rounding system will see cash payments made easier
Thai central bank sets out timeline for forex reforms
Some regulations are “obsolete”, Thai governor says
BoJ's balance sheet surpasses that of the Fed
BoJ's balance sheet exceeds ¥500 trillion, a fraction larger than that of the Federal Reserve in absolute terms, and much larger as a percentage of GDP
Central banks build expertise in move to riskier reserve tranches
Growing popularity of reserves tranching is stretching central banks’ capabilities, a new report finds, but they are turning to asset managers and other central banks for help
A regulatory storm hits China
Regulators are making a country-wide push to tighten supervision, in an attempt to pull the Chinese economy away from shadow banking and excessive credit growth
Uncertainty over size of European ‘shadow banks’ – ESRB
Central banks are improving data collection, but many details remain unclear, report says
Fed paper warns on helicopter money risks
Tool appears much less powerful when less realistic elements of the New Keynesian framework are removed; other options could work better, authors say
Venezuela’s central bank devalues bolivar as crisis continues
Bolivar devalued 64% in latest currency auction in an attempt to stem effects of financial crisis; Goldman Sachs comes under fire from opposition leader
People: Menon given fourth term; Irish chief economist retires
Singaporean governor awarded fourth consecutive term; Ireland’s chief economist retires, while the registrar of credit unions heads to the IMF; India appoints a new executive director; and more
Surprise RMB strengthening prompts unwinds
"A lot of long [US$] positions were unsustainable and had to be re-evaluated," says forex structuring head
EBA calls for reform of its funding and governance
Funding shortfalls are “unreasonable”, Enria says; some governance arrangements are “overly cumbersome”
MAS’s DLT project posts successful results
Network issues digital Singapore dollars across a DLT network to settle interbank debts; problems with credit risk and liquidity will be addressed in future work, central bank says
Bank of England threatened with strike action over pay
Union members to be balloted on strike after being awarded a “derisory” 1% pay rise; UK inflation currently running at 2.7% and forecast to rise further
Model risk falls under the CCAR microscope
Fed using qualitative reviews to test the quality of model risk governance
Pace of monetary easing may slow, says Central Bank of Brazil
Committee unanimously cut interest rates to 10.25%, but political uncertainty could slow the future pace of easing; economist praises approach to monetary policy communication
European institutions agree vote on securitisation programme
Council of ministers and lawmakers will vote in the coming weeks
Irish central bank gets new supervisory structure
Supervisory functions will be split into two “pillars"; Lane says increased mandate and greater European commitment means new structure is necessary
ECB and Riksbank present united front on reserves threat
Government proposals that could cut reserves in half may leave Sweden vulnerable to a crisis and would violate the central bank’s independence, institutions warn
Sarb calls for comment on framework for deposit insurance scheme
Facility will provide cover of up to 100,000 rand in the event of a bank failure, with emergency liquidity from Sarb if necessary
Deutsche Bank fined further $41 million by Fed
US central bank finds fault with banking giant’s AML function, months after UK regulators imposed similar fines; Deutsche has two months to submit reform plans
Global institutions strike Mongolia bailout deal
Institutions including the IMF, World Bank and People’s Bank of China strike a deal to provide funding and other support to the slumping economy
Spanish draft law would undermine financial reform, ECB says
Proposals on housing loan settlement would weaken “key pillar” of reform
IMF’s Werner: Latin America must keep debt under control
Western hemisphere chief says there are some concerning signs on debt, although the risk of a systemic crisis is low; region well placed to weather Fed shock