United States
Fed’s 2021 stress test includes major asset price shock
CCAR will evaluate 19 largest banks; scenario includes 55% fall in equity prices
Largest banks’ funding advantages grew in pandemic – research
Biggest banks’ perceived risk advantage grew after onset of Covid-19, researcher finds
Book notes: The political economy of the special relationship, by Jeremy Green
Unsatisfactory story about the decline and resurgence of the UK’s importance in the global financial system
Central banks look to shockproof models in wake of Covid-19
The Covid-19 crisis caused many central bank models to break down. Economists at the St Louis Fed, Bank of Spain and ECB were quick to innovate and say they will continue testing new tools
Frequent recessions push up US unemployment rate – paper
Cleveland Fed research says two decades of growth would produce 3.6% unemployment
ECB paper analyses US home ownership
Labour market dynamics and rising house prices account for generational inequality, researcher says
New York Fed’s markets chief leaves for White House job
Singh will hold joint security and economics position; Baum becomes acting head of markets
Fed small business survey paints grim picture
Most small businesses report revenue declines; many fear collapse without government aid
People: new vice-governors in Burundi and the UAE
Plus appointments at the CFTC and Caribbean Development Bank
One-size-fits-all regulation won’t meet fintech challenge – FSI paper
Banks and big tech require specific approaches to ensure system stability, says Fernando Restoy
Final NSFR rule unlocks subsidiary funding for US banks
Technical clarification allows subsidiary capital to be assigned as funding for consolidated group
More capital could increase lending during pandemic – paper
Philadelphia Fed research finds capital injections and lower requirements would both increase lending
Penalty fears drove US funds’ March run – NY Fed paper
Research finds “sophisticated” investors respond to asset signals but retail investors do not
Fed on hold in first policy meeting under Biden administration
Unanimous vote comes amid signs of possible further fiscal stimulus; new voting members join FOMC
Fed creates committee on climate change impacts
New York Fed supervision chief moves to DC to chair new body
Bundesbank paper estimates effects of Fed’s QE policies
Purchases of private securities were most expansionary measure, researchers find
IMF warns of ‘exceptional uncertainty’ in vaccine-driven recovery
Fund upgrades global forecasts amid early success of vaccine rollout
Sectoral shocks drive non-bank credit cycles – BIS paper
Authors explore interaction of bank and non-bank credit cycles
Design flaws in Covid relief package cost millions of jobs – Fed paper
Delay to paycheck protection programme had “very substantial” impact, economists argue
New York Fed to establish ‘innovation centre’
Search begins for director, who will lead collaboration with BIS innovation hubs
Covid-19 data gaps threaten US recovery, researcher says
Minneapolis Fed economist urges statistical agencies to include diagnosis questions in surveys
Banks must be able to explain AI models – Brainard
Fed governor says solving ‘black box’ problem is important first step in improving AI governance
Inflation could ‘approach’ FOMC target quicker than expected – George
Kansas City Fed president says decline in inflation has been idiosyncratic
Bank of Lithuania paper explores spillovers of US policy uncertainty
Authors find “significant recessionary and deflationary effect” and synchronous response worldwide