United States
Fed paper warns on helicopter money risks
Tool appears much less powerful when less realistic elements of the New Keynesian framework are removed; other options could work better, authors say
Inflation is preventing interest rates from rising faster, says Powell
Labour market progress points towards a faster pace of normalisation for the Fed, but below-target inflation is preventing rates from rising above the current “gradual pace”
Model risk falls under the CCAR microscope
Fed using qualitative reviews to test the quality of model risk governance
Brainard turns cautious on inflation concerns
Lack of wage growth and lower than expected inflation data could slow further monetary easing, says Fed governor; interest rates are likely to rise “soon”
Deutsche Bank fined further $41 million by Fed
US central bank finds fault with banking giant’s AML function, months after UK regulators imposed similar fines; Deutsche has two months to submit reform plans
Book notes: Crash Bang Wallop, by Iain Martin
A comprehensive study of the City of London and how it became the world’s leading financial centre prior to the financial crisis and the UK’s vote to leave the European Union
Fed minutes shed light on balance sheet shrinkage plan
System of caps would allow gradual reductions in the reinvestment of securities held under the QE programme
DLT expert: central banks should consider wider uses than just payments
Instead of payments, central banks should look to implement DLT for identity document transfer, says Michael Mainelli; expert takes more cautious view of the technology
BIS report points to benefits and costs of fintech lending
China, the US and the UK are the three largest markets, the working group’s report says
Tackling the ‘human agency’ problem
Central banks are readying their communication strategies to mitigate a populist backlash against their post-crisis policies
Kohn worried about weight of expectations on Federal Reserve
The weight of expectations on the US Fed may be too high; the US is not as well placed as the UK to tackle another major crisis, says the former Fed vice-chair
Fed report finds many people left behind by growth
Survey finds nearly a quarter of Americans struggling to pay their bills; problems concentrated in less-educated segments of the population and minority groups
Fed should make sure it does not ‘fall behind’ – Mester
US central bank should “remain vigilant” as employment reaches full capacity and the balance sheet begins to unwind; the Cleveland Fed president sees more rate hikes this year
New Glass-Steagall would not separate banks if implemented, says Mnuchin
US treasury secretary’s stance on banking reform appears to contrast with that of president Donald Trump, who has offered seemingly contradictory statements on regulation
US household debt surpasses pre-crisis peak
Household debt exceeds 2008 level for first time, driven in part by auto loans and student debt
Former Fed vice-chair Kohn on populism, top central bankers
Donald Kohn speaks to Christopher Jeffery about his fears for the Fed amid mounting populism, why he has few policy regrets and his experiences working with some of the world’s top central bankers
Kashkari: Fed should not seek to deflate asset bubbles
Spotting bubbles is too difficult and the costs of failure too great, the Minneapolis Fed chief warns, although he concedes raising interest rates remains an emergency option
Protectionism is a ‘dead end’, says New York Fed president
Dudley highlights the second-round impact of protectionism, which ultimately harms higher-paying jobs; policies should foster competition and provide more assistance to workers
New York Fed legal vice-president challenges ‘check the box’ mentality
If a compliance regime does not accept blame or responsibility, then it has failed says Held; regimes should not be afraid to uncover problematic behaviour
Kashkari has inflation concerns about bitcoin
The potential of digital currencies lies with underlying infrastructure, Minneapolis Fed president says; the Fed is “paying attention” to the issue
Growth of shadow banks led by risky investment vehicles – FSB
Shadow banks continue to gain ground, with those offering liquidity and maturity transformation showing some of the fastest growth
Capital deepening ‘virtually absent’ in US and eurozone – ECB
US and eurozone have seen major falls in net investment, an ECB article says
Bank of Italy paper finds no evidence of asset over-valuation
Researchers look at data from eurozone, Japan and US from 1980 to 2017
Increasing female participation in workforce will help US growth – Yellen
Fed chair examines barriers women still face when entering the workforce; increasing participation rate could help increase US output by 5%