Federal Reserve System
Micro-prudential policy ‘bulwark’ against systemic risks, says San Fran Fed’s Williams
President says prevalence of shadow banks limits use of conventional macro-prudential tools, but there are other ways to integrate the perspective into the regulatory framework
Fischer sees limits to Fed’s global responsibility
Federal Reserve vice-chair says the most important contribution the central bank can make to health of world economy is keeping its own house in order
Mario Draghi urges reform to ‘unleash’ eurozone potential
ECB president highlights importance of the credibility and type of structural reforms, as well as their interaction with other policies; Stanley Fischer points to ‘missing fiscal framework’
ECB research finds Greenspan's Fed responded aggressively to uncertainty
Working paper finds the Federal Reserve under Alan Greenspan took stronger action as economic uncertainty rose. In fact, risk seems to have been more significant than ‘conventional’ variables
UBS escapes DoJ prosecution and fine
But it pays a further £342 million to the Fed over FX conduct issues
Minneapolis Fed essay suggests new focus for FOMC comms
Sam Schulhofer-Wohl argues the FOMC should talk more about what it is trying to accomplish with its monetary policy; Minneapolis Fed staff rewrite January statement to illustrate point
Fed’s Powell supports relief for community banks facing compliance burdens
Governor Jerome Powell supports setting asset threshold of around $10 billion for both the Volcker rule and incentive compensation rules
Mexican deputy cautious of data-dependent Fed policy
Manuel Sánchez sees potential for smooth tightening if markets are able to price in rate changes, but remains alert to risk Fed is pushed into acting faster than planned
Evans: Fed must keep rates low to protect target symmetry
Chicago Fed president sees no serious costs with ‘modestly overshooting’ 2%, but is concerned about potential damage to inflation expectations of tightening too soon
In search of a better measure of inflation
Hedonic adjustments offer a way of tackling bias in the CPI, albeit at a cost, but new research suggests even these may be misrepresenting inflation – with broad implications for the economy
San Fran Fed president sees light at end of tunnel
John Williams says when short-term volatility is discounted, the US economy is nearing full employment, with an inflation trend running around 1.5%
NY Fed’s McAndrews warns negative rates could drag inflation down
Director of research highlights some of the more radical unintended consequences that could stem from negative rates, including new forms of currency and inflation moving in unexpected directions
Plosser lays out four principles of sound central banking
Former president publishes a reflective essay in Philadelphia Fed’s annual report for 2014; advocates clear objectives, systematic rules, open communication and stable independence
Chicago Fed research charts fall in natural rate of unemployment
Group of economists say an ageing population and rising education attainment could push the natural rate – currently at or below 5% – as low as 4.5% by 2020
Jobs data recovers in the US as Dudley looks to help small businesses thrive
Non-farm payroll employment increases by 223,000 in April after a difficult March; NY Fed president considers how small businesses can access credit and expand
Yellen says stability risks ‘not elevated’
Fed chair tells Christine Lagarde she does not see ‘the precursors of a financial crisis’, but singles out high stock valuations as a ‘potential danger’
NBER paper challenges Rey’s monetary policy dilemma
Authors find evidence to support the continued existence of a traditional monetary policy trilemma, casting doubt on Hélène Rey’s theory that the trilemma has broken down
San Fran Fed research analyses link between inflation targeting and growth
In an economic letter, two researchers find developing economies tend not to experience the same short-term bump in growth rates as advanced economies after adopting a target
Fed’s Mester calls for more work on monetary policy and financial stability nexus
Loretta Mester sets out three priorities for research on the consumer credit markets in the United States at conference in Philadelphia
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