Federal Reserve System
Fed raising bar for BNY Mellon – Powell
Fed working with treasury to ensure “smooth transition” as BNY Mellon becomes sole provider of government securities; bank must remain “robust”, says Fed’s Powell
Financial regulation courses should look more at liabilities – Tarullo
Fed board member suggests courses should be based around a “point of reference”
‘Hard’ law not enough to reform banking culture, says BoE’s Shafik
Market participants must do their bit to reform behaviour and culture in the financial services industry with ‘soft’ law playing a broader role, says BoE deputy
Lack of diversity is holding Fed back, says San Francisco president
Diversity critics have given the central bank the “kick in the pants” that was needed, said Williams, whose Fed branch is already making institutional changes to foster diversity
Fischer notes ‘considerable uncertainty’ around longer-run federal rate
Fed vice-chairman cites 2003 paper by Laubach and Williams
Fed might stimulate labour market with ‘high pressure’ economy
Fed president floats idea of dealing with weak labour markets by “high-pressure” economy; Boston Fed’s Rosengren points to key ‘puzzles’ in data on US economy
Belgian paper studies work of pioneer of regional economics
Robert Triffin was the “architect” of the European Payments Union
US FOMC has less room to respond to recession – Dudley
The US Federal Reserve would not be able to respond to a recession with a cut of the same “magnitude” as experienced in 2007, New York Fed president says; a risk management approach to policy is needed
Demographics could explain entire drop in real rate – Fed paper
Authors find ageing population can explain most – or even all – of the estimated decline in the long-run real interest rate, implying low rates are here to stay
Fed task forces begin review of faster payments proposals
Payments firms have submitted plans for real-time payment systems and toughened payments security; merits of plans to be assessed over coming year
Hike now to avoid more action later, says Fed’s Lacker
Richmond Fed president adds his voice to growing number of Fed officials calling for rate hike; Loretta Mester insists proximity to US election need not prevent action at next meeting
Book notes: Connectedness and contagion, by Hal Scott
Scott’s argument on the dangers of contagion has many appealing features, although he may be too eager to hand powers to unelected officials, writes Michael Reddell
US spillovers stronger for some countries than others – IMF paper
Paper assesses how US normalisation will spill across borders, identifying conditions where countries are most likely to be affected
Fischer: economics needs more diversity
Fed vice-chair says economics would benefit from more ethnic and gender diversity, outlining some ways in which the central bank is trying to move in that direction
Fed’s Yellen defends Brainard against congressman’s charges of political bias
No sign of political bias from FOMC members, Yellen says, amid accusations Lael Brainard might be looking for a job in a Hillary Clinton administration
Fed members differ on monetary policy, as Trump again attacks Yellen
Rosengren calls for “modest, gradual tightening”, while Kashkari sees slack in labour market; Republican candidate questions Fed’s political impartiality
Fed’s Tarullo: stress testing needs to evolve
Fed is planning to toughen its stress-testing framework with better alignment with regulation and incorporation of dynamic “amplification” effects – though more research is needed
ECB says it has learned lessons from simulated cyber attack
Federal Reserve, eurozone central banks and private firms took part in exercise to test Target2 payment system
Fed holds but two more dissenters call for hike
Case for hike is building, says Janet Yellen, but economy has “a little longer to run”; two more FOMC members join Esther George in voting for hike
BIS paper examines impact of money market deregulation and integration
Integration of money markets and ability of banks to raise funds using variety of substitutable instruments has implications for monetary policy, paper says; deregulation results in larger open market operations
Mexico inflation could be affected by exchange rate and US events
Mexico’s board to closely monitor exchange rate pass-through on consumer prices, quarterly review says; outcome of US election and the normalisation of the Fed's interest rate also a concern
FOMC members disagree over need for rate hike
Lael Brainard argues labour market suffers from slack and monetary policy is weak when dealing with weak demand; Dennis Lockhart confident of recovery, despite “frustrating” inflation data
Yellen ‘should be ashamed’ – Trump
Republican nominee for US presidency attacks Fed chair Yellen and says interest rates must be raised
IMF’s Singh urges central banks to beware of collateral impact of policy
Senior economist says asset purchase programmes have drained quality collateral from the system, damaging the economy’s “financial plumbing”