News
Data gaps hamper work on emerging market vulnerabilities – BIS paper
Large debt stocks, particularly in foreign currencies, point to vulnerabilities in some emerging markets, but gaps in the data are hampering analysis, BIS economists say
Mongolia’s central bank raises rates 450bp in bid to stop currency slide
Rate hike was prompted by fall in currency’s value since late June; central bank says it continues to see encouraging trends in currency flows
FSB fleshes out guidance on resolution
Reports add detail on emergency funding needs for global banks and maintaining the continuity of critical services during resolution; most standard-setting work expected to be finished in 2017
Bullard backs new approach to forecasting
Idea of economy converging to a single steady state has “likely outlived its usefulness”, St Louis Fed president says; instead reserve bank will now focus on regime-based forecasts
RBI should improve link between analysis and macro-prudential policy – FSB review
The Reserve Bank of India should consider regular financial stability meetings to set policy, and it needs to support its decisions with deeper analysis, a peer review finds
Belarus central bank reports ‘significant’ credit risk to country’s banking sector
A large proportion of Belarusian banks’ risky debts are owed as a result of financing government, central bank says; report echoes IMF call for major reforms to state-owned enterprises
Japanese researchers model success and failure of international cooperation
Various factors can lead to cheating on global monetary policy cooperation, paper published by the BoJ finds – but careful design can help the agreement hold up
Atlanta Fed president ‘not prepared to rule out’ further rate rise this year
Despite “troubling” headline GDP growth figures, “final real sales” figures point to US economy maintaining momentum and heading for third-quarter growth, Dennis Lockhart says
NBIM’s Q2 returns hit by Brexit turbulence
Second-quarter returns of 1.3% held back by European equities and UK in particular; real estate investments register second negative quarter
Tajikistan objects to Basel Institute’s anti-money-laundering criticisms
The Basel Institute’s grading of Tajikistan as the third-worst money laundering jurisdiction in the world is based on an “absolutely incorrect analysis”, the country’s central bank says
UK inflation climbs in first post-Brexit data
Prices rose 0.6% in the year to July, the highest inflation number for nearly two years, with signs the effect of the UK’s Brexit vote may be starting to feed through
San Francisco Fed chief calls for policy target re-think
John Williams calls for central banks to consider raising their inflation targets or replacing them with nominal GDP targets; lower natural interest rates seem “poised to stay”, he argues
Philippines leads improvement in Brookings financial inclusion rankings
The Central Bank of the Philippines says rapid progress last year reflects the success of its financial inclusion strategy; Brookings report highlights the importance of a wide-ranging approach
Basel reports target gaps in CCP resolution framework
Reports by CPMI-Iosco and FSB find there are still gaps in CCPs’ implementation of recovery and risk management principles and regulators need to think more about resolution planning
Okun’s law is empirically robust but presents modelling problems, researchers say
Economists need to find more sophisticated methods to model the relationship between financial and labour markets, say the authors of an occasional paper published by the ECB
Unconventional monetary policy does not rob the poor, Italian researchers argue
Studying the effects of the ECB’s quantitative easing programme on the wealth and incomes of 8,000 Italian households shows that the policies benefit the poorest, Bank of Italy paper argues
China to create own version of FX code
A newly established Chinese FX Committee is working on creating a Chinese version of the Global Code of Conduct, for domestic and foreign banks operating in the onshore market
PBoC gives World Bank green light as China’s first SDR bond issuer
World Bank to issue China’s first bond denominated in special drawing rights, in “landmark” step towards opening up Chinese bond market
People: BNM picks new assistant governor; Charlie Bean nominated to OBR post
Markets specialist takes over assistant governor role at Malaysian central bank; former BoE deputy to sit on budget oversight committee; new head of monetary policy research in Israel; and more
Blanchard sees reformed DSGE as ‘central’ to future of macroeconomics
Former IMF chief economist says DSGE models are “seriously flawed” but “eminently improvable”, and will have a leading role to play in the future
EBA suggests anti-money laundering measures for virtual currencies
Major new legislation or amendments needed to regulate payments in virtual currency, EBA says; suggests changes to proposed extension of regulation and calls for deadline for implementation
Chinese authorities should introduce inflation target – IMF staff
Report by IMF staff sets out ‘key elements’ of transition to more market-based monetary framework; encourages explicit inflation goal and new intermediate target for policy
Chilean central bank changes guidance and keeps policy on hold
Central Bank of Chile removes reference to continued normalisation as inflation returns to target range; holds benchmark rate at 3.5%
Anti-corruption unit investigates Curaçao and Sint Maarten central bank president
Anti-corruption unit conducts raid on Emsley Tromp’s home, confiscating documents and data carriers; investigation launched by finance minister on the back of ‘rumours and innuendos’