News
Reformed IMF could strengthen global safety net – paper
Improving the International Monetary Fund may require revised toolkit; global financial safety net is failing in many regards, and needs reform, IMF policy paper says
PBoC sets up renminbi internationalisation research centre in Singapore
The new Centre for Renminbi Internationalisation Studies (CRIS), launched today in Beijing, is a prestige victory for Singapore as it aims to position itself as a leading international RMB hub
Turkish central bank narrows rate corridor with cut
Central bank begins process of narrowing rate corridor in last meeting of Erdem Başçı’s term, though it keeps the policy rate on hold
Basel Committee restricts bank options for internal modelling
Banks will no longer be able to use the internal ratings-based approach for certain portfolios, and will face restrictions in other areas, under proposed rules
RBNZ proposes new powers over FMIs in times of crisis
Final crisis management plan proposal details two-tiered framework for FMIs; RBNZ and FMA would act if contingency plans not up to scratch
European Central Bank outlines three models underpinning macro-prudential analysis
First biannual macro-prudential bulletin lays out details of three key models, dealing with capital requirements, household finances and bank vulnerabilities
Solomon Islands urged to include renminbi in exchange rate basket by IMF staff
IMF staff suggest changes to exchange rate regime; Solomon Island authorities will consider expanding basket, but reject suggestion of using cash reserve ratio to mop up excess liquidity
AFI’s Hannig sees central banks bolstering resources to drive inclusion
Alfred Hannig expects central banks gradually to increase resources devoted to inclusion as they take more responsibility for the area; Alliance for Financial Inclusion announces independence
Weidmann says latest ECB package went ‘too far’
Bundesbank president says the council was agreed on the need to act in the wake of weaker economic projections, but the eventual measures, including an expansion of QE, were too much
Governor sees Chile progressing with macro-prudential framework
Working paper outlines importance of macro-prudential policy in maintaining financial stability; Vergara and Raddatz identify counter-cyclical capital buffer as a possible tool for the future
Economists still scrambling to adapt models to lower bound
Many traditional economic models perform poorly now major economies are near the effective lower bound, but economists at the RES annual conference offer a range of solutions
IMF urges Mauritius to form macro-prudential authority
Central bank would have “prominent” role in new authority; as a first step, IMF staff recommend establishing a technical group featuring representatives from multiple stakeholders
Negative rates one of many pressures on bank business models, Lautenschläger says
ECB supervisory board vice-chair says business models must cope with a range of challenges, of which low rates are just one; Nouy and Lautenschläger field questions following annual report
Villeroy de Galhau calls for eurozone finance minister
Banque de France governor calls for single eurozone finance minister to co-ordinate fiscal and structural policy; warns of dangers of “overburdening monetary policy”
Nakaso considers how policy-makers could respond to low bank profitability
Bank of Japan deputy notes financial stability risks from monetary easing are low at present; considers how to respond to overheating or low profitability if necessary
Low profitability and NPLs remain top of the eurozone supervisory agenda
European Central Bank presents annual report for supervision, with major concerns including profitability and non-performing loans; supervisors are working closely with the single resolution board
Government approves final stage of Thai development plan
Bank of Thailand will promote electronic payments in latest phase of financial sector master plan; all phases to be completed by 2020
RBNZ investigating possible leak
Central bank launches external investigation, after former RBNZ economist was told there would be an unexpected rate cut before the decision was made public
People: Georgian board approves new governor; T&T gets new board
Koba Gvenetadze clears penultimate hurdle to becoming National Bank of Georgia governor; six new directors join the Central Bank of Trinidad and Tobago; BIS names Alexandre Lamfalussy fellow
BoE’s Forbes outlines new thinking on current account imbalances
Breaking current account into trade and financial components allows more detailed analysis of when a large imbalance is dangerous and what shocks could cause trouble
IMF staff praise Colombian policy mix as central bank hikes by another 25bp
Co-ordinated policy action is supporting “orderly adjustment” in Colombia’s economy, IMF staff say, including good pass-through of rate hikes; central bank continues to tighten
Vítor Constâncio calls for macro-prudential tools to reach beyond banks
Authorities should be granted wider powers over alternative investment funds and shadow banking sector, including margins and haircuts on derivatives and securities financing, Constâncio says
Inflation expectations well-anchored, Richmond Fed president says
Lacker tells audience at Banque de France he believes expectations are anchored, despite drop in inflation compensation; Villeroy de Galhau notes drop in market-based measures in eurozone
Eurozone not at zero lower bound, Praet says
ECB chief economist Peter Praet has said the eurozone is not at its zero lower bound; remarks may not contradict earlier guidance by ECB president Draghi