Federal Reserve System
Impact of Fed’s QE often larger in EMs than US, research finds
IMF working paper examines cross-border effects of unconventional monetary policy in the United States using a global vector error-correction model
Fed updating supervisory guidance on community banks
A deputy director tells subcommittee in House of Representatives the Fed has ‘several efforts underway’ to provide regulatory relief for community banks
Interview: Manuel Sánchez on shifting financial stability risks
Bank of Mexico deputy governor speaks about monetary policy normalisation in the US, the limits of macro-prudential tools and developing capital markets
Fed’s Claessens challenges banking Balkanisation theories
Theories emphasising the collapse in cross-border credit since the financial crisis fail to capture a ‘secular trend’ towards emerging markets, says Fed senior adviser
Central banks of Colombia and Peru expect bond impact from Fed rate hike
Even though markets are already anticipating a Fed interest rate hike, it will still have an impact on bond markets and asset prices, the governors of the central banks of Colombia and Peru argue
Volcker proposes new regulatory structure with Federal Reserve at its heart
The Volcker Alliance sets out proposals for a new regulatory structure in the US that seeks to address the ‘fragmentation, overlaps and glaring gaps’ in the current system
Bank of Mexico paper warns of EM bond runs
Paper stresses vulnerability in face of Fed lift-off, even with low levels of leverage, noting mechanisms essentially unrelated to degree of leverage can determine financial stability
Mexican deputy tells EMs to assume US rate hike coming ‘sooner rather than later’
Javier Guzmán Calafell advises emerging markets to prepare ‘as fast as possible for a worst-case scenario’ in anticipation of the Federal Reserve tightening policy later this year
Europe/US policy divergence ‘good news’ for monetary system, says top central banker
Spill-overs should not be a factor in monetary policy decisions; precedents for European and US policy to diverge, says top-level European central banker
Nothing magical about targeting 2%, Bernanke says
Former Fed chair calls for further research on ‘alternative intermediate targets’ for monetary policy during IMF panel; will work with hedge fund Citadel as adviser on range of topics
Fed presidents still divided on timing of rate hike
Heads of the Federal Reserve Banks in Atlanta, Boston and Cleveland offer different takes on current economic conditions; all united in desire for more data
Sri Lanka, Indonesia take different tacks despite common imbalances
Central Bank of Sri Lanka cuts interest rates while Bank Indonesia holds; both banks are grappling with external deficits, making them vulnerable to outflows
Fed research: Three channels of shadow banking fragility
Working paper models the increased fragility created by shadow banks, even though they provide higher levels of credit to the economy
FOMC minutes: Fed cautious about June rate hike
Minutes highlight split in views of those who think rates should rise in June and those who would rather wait; Dudley and Powell give speeches urging care
Fed officials renew calls to tackle inequality
Janet Yellen highlights need for further research into income inequality, while Lael Brainard focuses on young people and Narayana Kocherlakota on Native Americans
Fed paper measures damage from capital flow surges
Researchers find surging capital flows push labour away from manufacturing, create sudden booms and recessions, and do more damage if there is a sudden reversal
Jacques de Larosière on the international monetary system and the eurozone
Central Banking’s Chris Jeffery speaks to former IMF chief Jacques de Larosière about efforts to restore the global financial system and challenges for the eurozone at the Central Banking Awards 2015
Fischer looks to strengthen non-bank solvency and liquidity
Fed vice-chair says key issues for promoting non-bank sector stability are solvency and liquidity, and suggests policies that could be used to strengthen these areas
Yellen sees potential benefits in ‘tight’ labour market
Fed chair Janet Yellen says allowing unemployment to fall below its longer-run level for a short time could help return inflation to target quicker and boost productivity
Fischer sets sights on shadow banks
Fed vice-chair says US regulators must do more to regulate non-banks, including improvements to wholesale funding, better data and regulation that evolves at the same pace as the industry
Fed’s Evans harbours ‘serious concerns’ over inflation
Chicago Fed president wants to see stronger wage growth and a recovery in ‘long-term inflation compensation’ demanded by investors before sanctioning rate hike
Fischer sees shocks disrupting future path of rates
Fed vice-chair Stanley Fischer says smooth upward path for the federal funds rate will ‘almost certainly not be realised’ given the likelihood of shocks in the US economy
Cleveland Fed’s Mester sees guidance as 'comms device'
Loretta Mester believes the Fed should stop using forward guidance as a policy tool when economic conditions have normalised and stick to setting out its reaction function
ECB forecasts ‘gradual’ increase in US inflation
Economic bulletin published by ECB agrees with FOMC that inflation will increase gradually as labour market conditions improve and impact of low oil prices and high dollar fades