United States
Coen seeks to quell European fears on Basel III
European parliament members accuse Basel Committee of favouring US over European banks; William Coen says “Basel process” is transparent and not dominated by any one interest
Top US and EU officials hold resolution war game
US, UK and eurozone central bankers, regulators and politicians participate in an exercise designed to improve the co-ordination of cross-border resolution
European Commissioner cautions US on TLAC rules
Dombrovskis says foreign banks should not be mistreated by Fed internal TLAC proposal
Demographics could explain entire drop in real rate – Fed paper
Authors find ageing population can explain most – or even all – of the estimated decline in the long-run real interest rate, implying low rates are here to stay
Fed task forces begin review of faster payments proposals
Payments firms have submitted plans for real-time payment systems and toughened payments security; merits of plans to be assessed over coming year
Hike now to avoid more action later, says Fed’s Lacker
Richmond Fed president adds his voice to growing number of Fed officials calling for rate hike; Loretta Mester insists proximity to US election need not prevent action at next meeting
US spillovers stronger for some countries than others – IMF paper
Paper assesses how US normalisation will spill across borders, identifying conditions where countries are most likely to be affected
Inflation worries prompt action from Bank of Mexico
Central bank hikes interest rate by 50bps in last monetary policy meeting before the US presidential election; peso proves volatile in face of international events
Fischer: economics needs more diversity
Fed vice-chair says economics would benefit from more ethnic and gender diversity, outlining some ways in which the central bank is trying to move in that direction
Fed’s Tarullo: stress testing needs to evolve
Fed is planning to toughen its stress-testing framework with better alignment with regulation and incorporation of dynamic “amplification” effects – though more research is needed
Eurozone employment-to-GDP-growth ratio has recovered strongly – ECB
Employment growth concentrated in Spain and Germany; productivity remains “stagnant at pre-crisis levels”
‘Absolutely urgent’ for Mexico to strengthen fiscal stance – Sánchez
Bank of Mexico deputy governor stresses need for fiscal revamp to bolster the Mexican economy as monetary policy can only carry so much weight
Mexico inflation could be affected by exchange rate and US events
Mexico’s board to closely monitor exchange rate pass-through on consumer prices, quarterly review says; outcome of US election and the normalisation of the Fed's interest rate also a concern
FOMC members disagree over need for rate hike
Lael Brainard argues labour market suffers from slack and monetary policy is weak when dealing with weak demand; Dennis Lockhart confident of recovery, despite “frustrating” inflation data
Yellen ‘should be ashamed’ – Trump
Republican nominee for US presidency attacks Fed chair Yellen and says interest rates must be raised
Chinese financial spillovers to Asia-Pacific on the rise – BIS paper
Working paper finds Chinese equity markets now have almost as much of an impact on Asia-Pacific as the US, though the effects differ in stressed and placid times
Boston Fed’s Rosengren highlights risk of overheating
US economy looks “resilient”, despite some mixed signals from the data, says regional Fed president; advocates process of gradual rate hikes as the risk of an overheating economy grows
George and Lacker push back against calls for Fed governance reform
Presidents say mixed public-private funding and governance helps protect the independence of the regional Feds, though others warn private banks are having too much say in policy
Major economies show clear credit price cycles, researchers say
Housing markets are a key influence on credit prices cycles in the US and major European economies, an ECB paper argues
US credit constraints heighten global propagation of financial shocks, researchers argue
Normal credit conditions in domestic US economy greatly lessen the global impact of American financial shocks, a European Central Bank paper argues
Yellen: future policy-makers may need new tools to tackle recessions
Fed chair says equilibrium rates may not be high enough for rate cuts to deal with all eventualities, so US policy-makers may need to think more laterally about their options
Book notes: The power of a single number, by Philipp Lepenies
Lepenies offers a brief but very readable treatment of GDP's political history, drawing out some important lessons in the process
Overhaul of Federal Reserve structure is needed, paper says
Former adviser to Bernanke co-authors paper stressing need to end private control of 12 regional Fed banks; diversity and transparency need improvement, authors argue
US inflation target within ‘hailing distance’, says Fischer
The Fed is “close” to its targets says vice-chair; despite recent weak GDP figures, Fischer expects investment to recover in coming months