United States
Traditional banks played leading role in creating US credit boom, paper finds
Traditional banks played a larger role than ‘shadow’ banks in originating US loans in the lead-up to the financial crisis, paper published by Deutsche Bundesbank says
Building a fast, flexible and free DSGE model
A team at the New York Fed is part way through translating its DSGE model into Julia, a fast, open-source mathematical programming language
Meltzer criticises Burns and Bernanke over Fed independence
Allan Meltzer criticises the former Fed chairs for giving independence away; wants to incorporate a rule into policy-making, while Peter Conti-Brown favours governance reforms
Fed board gets financial stability division
The office of financial policy and research, established in 2010 to co-ordinate work across the board, is reclassified as a financial stability division; Fed cites “growth in responsibilities and staffing”
Book notes: The power and independence of the Federal Reserve, by Peter Conti-Brown
Conti-Brown offers a call to action to fix the legitimacy of the Federal Reserve System, which is looking increasingly dated
ECB paper presents evidence of risk-taking channel in US
Working paper finds interest rates affect the quality of bank credit in the US; researchers exploit confidential data on banks’ internal ratings of loans
Fed presidents get to grips with weaker productivity data
John Williams and Neel Kashkari discuss short- and long-term factors that could be depressing productivity growth; latest data reveals further slide in quarterly figures
US data can help nowcast Canadian growth, paper finds
Working paper published by Fed board introduces US data into dynamic factor model used for nowcasting the quarterly real GDP growth rate
Fed presidents navigate ‘mixed signals’
Dennis Lockhart is putting more weight on positive employment picture than disappointing growth stats; both he and Robert Kaplan see potential for labour force to expand
Book notes: Lehman Brothers: a crisis of value, by Oonagh McDonald
McDonald's book offers a useful synopsis of the multiple failings at Lehman Brothers running up to 2008, but ultimately fails to add significantly to what was already known
Fed holds and drops reference to global risks
Federal Open Market Committee holds federal funds rate as widely expected; suggests growth in economic activity has slowed but concerns about global developments have eased
Paper explores reserve management in closed economies
Working paper published by IMF presents intertemporal optimisation model designed to help assess how closed economies should use their reserves when guarding against current account shocks
Fed liftoff pushed some rates down – Riksbank paper
Researchers find hike in policy rate lowered average interest rates on subprime lending, and narrowed spreads with the less risky section of the market, using novel "scraped" data set
Women feature heavily on new US dollar designs
Final designs to be announced in 2020, Treasury secretary announces; while security features are yet to be announced, multiple historic female figures will be incorporated into designs
Minneapolis Fed to explore resolution alternatives in TBTF initiative
Neel Kashkari adds alternative resolution mechanisms to the agenda as Minneapolis Fed looks for solutions to the too-big-to-fail problem; discusses outcomes from this month’s symposium
Fed should stay the course with gradual rate rises – Lacker
The Federal Open Market Committee should continue raising rates, suggests Richmond Fed president; oil price falls and financial markets volatility both stabilising, Lacker argues
Data dependence catching on, says San Fran Fed president
Market participants have become more responsive to economic news since 2015 in both the US and UK, research by Benjamin Pyle and John Williams finds
Summers: Fed is not ready for next crisis
Secular stagnation has left Federal Reserve short on firepower as the next recession looms, economist says; urges greater willingness to risk inflation overshoot and action by fiscal authorities
Some Fed officials concerned April hike would ‘signal a sense of urgency’
Minutes from March meeting reveal caution around prospect of a hike this month, given prevailing headwinds and risks; next meeting on April 26–27
Fed picks McKinsey to scrutinise faster payment proposals
Consultancy firm will assess options for a real-time system across the US, as task force members are invited to submit proposals
Yellen: volatile global outlook calls for gradual hikes
Fed chair soothes market concerns over pace of rate rises, highlighting importance of low rates in offsetting troubles abroad and saying rates will rise more slowly than previously indicated
Philadelphia Fed president warns of ‘mismatch’ between education and business
Patrick Harker says there is a disparity between the education offered and practical skills needed by businesses in the US, which has likely contributed to slow recovery following crisis
Inflation expectations well-anchored, Richmond Fed president says
Lacker tells audience at Banque de France he believes expectations are anchored, despite drop in inflation compensation; Villeroy de Galhau notes drop in market-based measures in eurozone
Rosengren eyes balance between bank resilience and loans
Boston Fed president tells New York conference that supervisors should encourage banks to maintain lending when striving to meet capital-to-asset ratios, but stress the need for quick recapitalisation