United States
Fed proposes expanding risk regime to foreign subsidiaries
New consultation suggests widening the scope of the August 2017 proposals to foreign-owned operations
Richmond Fed paper explores Fed’s monetary policy history
The author identifies a lack of consensus on the nature of the monetary regime as a policy weakness
People: Bank of England official to become FCA chair
Charles Randell to take over as FCA chair in April; BoE appoints its first job sharers at executive director level; Vietnam names deputy governor; Mark Mullinix to leave Fed; and more
New US tax plan promising for growth – Fed minutes
FOMC members revise the growth outlook upwards for next 12 months, as tax cuts promise to provide “some boost” to consumer spending
Fed paper studies inequality in three dimensions
Authors find examining three dimensions simultaneously gives new insights
Demographic changes reduce US labour participation rate
As the baby boomer generation retires, the recovery cannot offset their absence
Economists are misinterpreting ‘Triffin dilemma’, says BIS paper
Michael Bordo and Robert McCauley argue there was nothing certain about the collapse of Bretton Woods, but Triffin’s successful prediction led others to mistakenly reapply his theory
Some banks’ living wills have ‘shortcomings’ – US agencies
The latest assessment finds previous “deficiencies” have been corrected, but four banks show less serious “shortcomings”
Fed paper sets out model of financial panics
Mark Gertler, Nobuhiro Kiyotaki and Andrea Prestipino examine banking panics in a DSGE model
FOMC will lose two dissenting doves in 2018
Kashkari and Evans were the only members who voted against the last rate rise on December 13
Public spending cuts have bigger multiplier than fiscal stimulus – paper
Research weakens case for expansionary policies, say authors
Google’s Hal Varian on how technology is changing economics
Google’s chief economist talks to Christopher Jeffery about how big data and machine learning are facilitating changes in economic thinking; discusses the impact technical breakthroughs may have for central banks
Bank of Mexico hikes rates as inflation rises
Central bank resumes tightening path as Mexican economy faces trade and currency challenges
Fed backtracks on CCAR cleared swaps exposure
Regulator had also postponed plan to feed cleared client exposure into G-Sib rankings
Demography, tech reduce US natural unemployment rate – paper
Baby boomers remain active longer, and older workers record lower levels of unemployment
Fed hikes as Yellen hails strong job growth
Janet Yellen gives her last press conference as Federal Reserve chair
Early asset purchases much more successful – BIS paper
Authors find effectiveness falls over time as the shock wears off, questioning the value of long-running quantitative easing
Financial distress in the US is concentrated in a small percentage of consumers
Around 10% of consumers account for 50% of all distress events, research finds
Fed finalises new market benchmarks
Three transaction-based alternatives to US dollar Libor will launch in 2018
Paper: foreign fund inflows raised US pre-crisis risk-taking
The Bank of Italy paper correlates data on foreign inflows with four indicators of risk
Fed proposes sharing more information about stress tests
Proposal includes insights about how the regulator estimates hypothetical losses
People: Fiji appoints deputy; Commission proposes new SRB chair term
Esala Masitabua will become deputy governor in Fiji on January 1, 2018; European Commission proposes extending Elke König’s mandate as chair of the SRB; and more
Diversified export markets may offset Mexican Nafta showdown
Bank of Mexico sees a failure to renegotiate the trade deal as the biggest risk to the economy
BIS top body poised to approve Basel III
The GHOS meets on December 7, and all signs indicate it will finally give Basel III the green light