Europe
EU common debt to boost euro’s international role – ECB
Currency still faces negative rates, fragmented debt market and lack of triple-A assets
‘Preventive restructuring’ reduces unnecessary bankruptcies – BdF paper
Researchers compare data from French preventive restructuring and traditional bankruptcy systems
Eurozone inflation reaches target for first time since 2018
Early estimates suggest HICP inflation hit 2% in May
The Belt and Road Initiative 2021 Survey – The impact of Covid‑19 on the BRI
The fourth annual Belt and Road Initiative survey reveals that the Covid‑19 pandemic has disrupted many projects despite China remaining committed to financing the initiative, which is expected to support future economic growth and environmental…
ECB should adopt symmetric 2% target with AIT – US economist
Academics and former officials say ECB’s new policy framework needs to be nimble to react more quickly to inflation changes
Time series models need adapting for Covid-19 shock – ECB paper
Authors explain methods for making Phillips curves and VAR models more robust
EBA finds ‘big differences’ in use of EU green taxonomy
Risk-mapping exercise finds average “green asset ratio” of 8%
The future of forward guidance
BNP Paribas Asset Management explores the current landscape around forward guidance, focusing on how central banks’ methods of communication are likely to evolve in the future. By Richard Barwell
Energy prices boost eurozone inflation in April
Consumer price index increased year on year by 1.6%, as energy prices increased by 10%
Eurozone starting to see ‘light at the end of the tunnel’ – de Guindos
ECB’s ‘Financial stability review’ highlights pandemic’s uneven effect across countries and sectors
ECB paper offers model of interbank contagion
Researchers say policymakers can use their work to prevent and manage financial crises
Book notes: Quantitative easing, by Jonathan Ashworth
Well-documented and fairly comprehensive book for anyone, including central bankers, wanting an overview of how monetary policy has evolved in recent decades
German court dismisses challenge to ECB bond-buying
Constitutional court ends long-running challenge to asset purchase programme
Policymakers should consider adjusting ECB’s target – BdF paper
Lower eurozone r* points to adjustment of monetary policy strategy, researchers find
Don’t dismiss inflation risks but don’t overreact, say central bankers
Sbordone, Smets and Vlieghe weigh up challenges for central banks in the “return towards normal”
Cash infrastructure as public good – implications for the cash cycle
Efforts are under way in the Eurosystem to safeguard cash infrastructure as a ‘public good’ even as transaction volumes have fallen significantly. How can policy-makers strike the right balance?
EU banks that were stress-tested reduced credit risk – ECB paper
Banks that were subject to 2016 stress tests reduced risk compared with control group, researchers find
The new era of money supply and its impact on policy
The empirical relationship between money and inflation has changed, writes Manmohan Singh, with Apoorv Bhargava and Peter Stella. To understand current policy challenges, we must first understand money creation
ECB rate-setters ‘broadly agree’ with loose policy
Governing council members warned financing conditions were still tighter than in December 2020
ECB officials suggest dropping market neutrality
Isabel Schnabel and Frank Elderson say climate change requires new approach to bond purchases
Danish central bank urges use of payments data in forecasts
Data provides good forecasts during normal times, but deteriorates in stressed conditions
Swedish investors favour EU-wide securities market harmonisation
But public consultation receives some resistance to using Target2-Securities for Swedish securities settlement
Asset managers should face minimum cash levels – ECB paper
Researchers say macro-prudential measure would improve market allocation of financial resources
People: ECB appoints head of climate change centre
Bank of Italy names new head of financial supervision; Kansas City Fed appoints assistant vice-president