United States
US policy having a larger impact on credit – BIS paper
Monetary policy’s effects on credit and housing markets have grown while the effects on inflation have weakened, paper finds
Inflation data causes rift in FOMC
Fed officials discuss whether incoming low inflation data is “transitory” or is a sign of worrying things to come; minutes outline balance sheet unwinding but date remains unknown
Big data sheds light on income risk – Minneapolis Fed research
Better sources of data have allowed economists to gain new insights into how income risk changes over the cycle, says researcher
Basel Committee flags shortfalls in implementation
European Union is yet to fully comply with the liquidity coverage ratio, while many jurisdictions are lagging behind in other areas
IMF paper backs issuance of central bank digital currencies
Fund finds large benefits to issuing own digital currency in terms of cost savings and efficiency gains, but issues around distribution remain
Fixing the ‘perverse incentives’ in the SLR
Richard Heckinger warns the US’s supplementary leverage ratio in its current form discourages banks from using central counterparties
Bond sell-off slows as markets digest central bank comments
Upbeat comments from ECB and BoE chiefs trigger brief tantrum, but bond markets now appear to be settling down
People: Fed appoints new CFO; Mishra returns to IMF after stint at RBI
Fed chooses Ricardo Aguilera as new CFO; Prachi Mishra returns to the IMF; Bank of Russia appoints new head of resolution department
Survey data can help with modelling expectations – BoJ paper
Discussion paper outlines method of incorporating survey data as a proxy for expectations, with “promising” results for inflation modelling in the US and Japan
Fischer cautions against complacency
Fed vice-chairman says it would be “foolish” for policymakers to think they have eliminated all risk; there are still areas where supervisors have “limited insight”, says Fischer
Yellen urges caution on regulatory adjustments
Janet Yellen and Mark Carney say the US could adjust its banking regulations without undermining global standards; Basel’s Coen stresses need for co-operation
Biggest US banks weather severe stress test
Fed report on stress tests applied to 34 bank holding companies indicates largest institutions would remain well capitalised even in a severe shock
Book notes: Can We Avoid Another Financial Crisis?, by Steve Keen
Steve Keen challenges “mainstream” economic thinking in this concise book, hoping to shift the political debate on debt
Fed’s Powell looks for ways to reduce ‘unnecessary burden’ of regulation
Fed governor tells senators he sees room in some aspects of post-crisis reforms to ease the burden on banks, though he stresses the need for “vigilance” against new risks
Asset purchase programme is key to central bank credibility – ECB paper
Researchers analyse market reactions to unconventional monetary policy decisions
OCC warns on cyber risks from subpar patches at US banks
Regulator says banks have good track record overall, but exams reveal weaknesses
Chicago Fed’s Evans: central bankers may be biased against inflation
Chicago Fed president thinks current policymakers may have overcompensated for inflationary bias of the past
No ‘Taylor rule’ without Meltzer’s support
John Taylor says he would “likely have done other things” if not encouraged by Allan Meltzer to develop the eponymous rule
Kashkari chooses between ‘faith and data’
Minneapolis Fed president says FOMC should have waited to see if inflation rise was transitionary before raising rates in June
People: Fijian deputy takes over in interim as Whiteside departs; FCA chairman to step down
Fijian deputy governor takes over as interim governor as Whiteside departs; FCA’s John Griffith-Jones to leave next year; Fed’s payment system director to retire; and more
Making the rules and breaking the mould (Allan Meltzer: 1928–2017)
John Taylor writes about the extraordinary life of a pioneering economist whose lifelong work defied traditional rules – but one who strongly advocated them for central banks
Crapo: US Treasury reforms will be ‘complicated’
Democrats unlikely to back changes that benefit big banks, Senate banking committee chair says
Yellen willing to reassess 2% target
Fed chair says question of the right target level is one of the most important facing central banks today; wind-down of QE likely to be dull, she adds
FOMC votes for hike but stays cautious on outlook
Fed committee votes for second rate hike of 2017, but enthusiasm for further tightening appears to be fading