United Kingdom
BoE issues consumer credit warning to banks
Preliminary stress-test results show UK banking system could incur £30bn loss over three years; UK central bank says financial system is “underestimating losses”
Don Kohn extols virtues of co-operation across policy domains
Good communication between policymakers in different spheres and complementary policy action can bring significant benefits, FPC member says
BoE economist discusses danger of ‘virtual’ bank run
Faster payments and rise of smartphone technology have made it possible for consumers to drain commercial banks without having to leave their homes, official says
Brexit brings inflationary risks, Carney says
“Continued erosion of slack” is putting pressure on MPC, governor says
BoE’s Vlieghe: financial sector may have pushed rates down
MPC member suggests end of the gold standard seems to have lent a negative skew to growth; gives hawkish signals on future policy
Hawkish signs appear in BoE’s latest communication
Committee still split 7–2 in favour of keeping policy on hold, but members flag possibility of a hike at the November meeting
DLT not ‘necessary’ for central bank digital currency – BoE economist
BoE economist says there are many technological requirements for successful digital currency, but ultimately there are serious economic questions to answer too
People: Fijian interim governor appointed permanently, Azerbaijan deputy leaves
Fiji’s Ariff Ali appointed on permanent basis; Azerbaijan deputy steps down; Bank of England retains PRC members; and more
BoE paper adds time-varying parameters to DSGE model
Method allows parameters to shift over time as the structure of the economy changes, yielding improvements to forecasting
Mark Carney takes over two BIS chairmanships
Bank of England governor adds two further chair positions to his several existing roles, taking over from Agustín Carstens
Bank of England strikes deal to end pay dispute
Deal follows three days of industrial action and heads off a threat of more to come; union will play larger role in future pay negotiations
BoE paper mulls tensions in PRA competition objective
Paul Fisher and Paul Grout argue a secondary competition objective can be made to work without clashing with primary objectives
BoE authors outline machine learning framework
Paper offers guide to machine learning in central bank analysis, and sets out a few examples relevant to policy
BoE’s Saunders says public is ready for rate hike
External MPC member denies hike would negatively impact household spending, noting inaction could leave the central bank behind the curve
Customer relationships affect severity of bank runs – research
Swiss experience of the global financial crisis offers natural experiment to test what can exacerbate or mitigate a bank run
Better information bolsters policy pass-through – BoE paper
Where agents lack access to perfect information, publishing forecasts influences potency of monetary policy, study finds
BoE economist argues against benefits of cryptocurrencies
Cryptocurrencies have “failed” to compete with fiat currencies as an alternative store of value
Wage growth may be stronger than headline figures suggest
San Francisco Fed researchers point to evidence that headline figures may overstate wage weakness; UK figures provide a positive surprise
PRA’s tough line on Pillar 2 disclosure divides lenders
Watchdog seeks to level playing field with public disclosure of total capital requirements
BoE’s ‘difficult decision’ to stick with animal fat substrate
UK central bank rejects the palm oil alternative, despite successful trials; the decision is based on cost and sustainability concerns
Where have all the women gone?
The number of women working at central banks has increased substantially, but a glass ceiling appears to remain for those reaching for senior management positions
People: IMF official appointed Bank of Ghana deputy; new communications chief for BoE
Former IMF official appointed first deputy at Bank of Ghana; BoE forecasting chief moves into new communications role; and more
Book notes: The Spider Network, by David Enrich
A thrilling exploration of how currency trader Tom Hayes and confederates managed to corrupt the UK banking system in what has become one of the largest financial scandals in history
BoE to appoint ‘conflicts officer’ following review
Compliance review revealed there was a lack of understanding around reporting conflicts of interest; under new framework senior officials will have to report annually