Research
Regulation affects pass-through to current account, BoE paper finds
Discussion paper sets out theoretical and empirical backing for idea that low rates can cause a current account deficit to grow, in the presence of liberalised financial markets
Securitisation can dampen business cycles, paper finds
When securities are bought by ‘non-financial agents’ instead of financial intermediaries, they can help dampen rather than amplify cycles, research says
Central bank models need to adjust to nature of exchange rate pass-through, paper says
Exchange rate pass-through shown to be incomplete, endogenous, nonlinear and asymmetric; working paper seeks to quantify effect over time
Networks did not spread 2008 shocks in eurozone money market, paper argues
Banking networks in the eurozone did not play a major role in spreading shocks in the financial crisis, ECB working paper argues; eurozone banks are ‘not network dependent’
US monetary policy contraction means drop in global output – paper
Raising interest rates in the US leads to lower global output and inflation in the short term; most 'pronounced' responses evident in the mid-1990s to mid-2000s
Dutch pension funds show signs of herding, paper says
Regulatory price of risk for different asset classes 'should be balanced', warns Dutch working paper, in light of herding behaviour
Research calls for better understanding of ML/TF risks in Islamic finance
Working paper published by International Monetary Fund warns there is ‘no common understanding’; some risks may be the same as in conventional finance, but some may not
Colombian inflation measures might be ‘overstating’ true level – research
Some core inflation measures are failing to filter the impact of exchange rate on prices; policy-makers must be aware of the risk of expectations losing their anchor
Central Bank of Malta revamps main structural model
Version three of the ‘Stream’ model captures the interlinked nature of the fiscal and financial sectors, with extra detail added to the financial block and new data used for estimation
Mexico’s stress tests reveal some institutions remain ‘vulnerable’ in extreme scenarios
Stress tests indicate that even in adverse scenarios banking sector remains sound; some banks and investment funds are vulnerable to extreme scenarios, including interest rate adjustments
Paper looks at macro-prudential impact on mortgage affordability
Working paper assesses how macro-prudential policies influence the share of households that can “access and sustain” a mortgage at different loan-to-value ratios
Wholesale funding shocks hit credit supply, paper finds
Shocks to securities and interbank lending markets have significant effects on banks’ supply of credit, an ECB paper finds; researchers use monthly loan data for eurozone banks
Eurozone sovereign debt crisis has increased financial fragmentation, paper argues
Eurozone corporate bonds have different risk premia according to which country a company is headquartered in, paper argues; fragmentation has ‘dampened effectiveness’ of ECB policy
RBI paper questions impact of global spillovers
Authors find money and credit markets in India are largely unaffected by spillovers, although there is an impact via debt markets and the indirect effects of global growth and inflation
Germans have unexplained high cash preference – Bundesbank article
Germans have a much higher tendency to use cash for larger transactions, article in a first edition of a new Bundesbank publication says
Hong Kong activity should weather higher rates – paper
Research published by IMF argues consumption and investment will “remain robust”, despite increase in interest rates in tandem with the US
ECB’s liquidity provision had ‘highly uneven effects’ on interbank markets, paper argues
ECB emergency liquidity provision had very different effects on stressed and non-stressed interbank lending markets; paper reconstructs interbank lending from Target2 database
Christchurch recovering after quake, RBNZ paper finds
Economy proves ‘resilient’ to earthquake as rebuild continues; uncertainty around the timeline puts off businesses from investing in the region
Tighter quality standards on banknotes not needed, DNB paper suggests
The Netherlands Bank maintains the European minimum standard for sorting euro banknotes, as study sees no reason to impose stricter requirements
Strong action needed to tackle credit booms, research finds
Study of macro-prudential policy use in south-east Europe finds policies must be broad, powerful and carefully calibrated if they are to work
High debt tends to reduce consumption growth – Norges Bank memo
Research tries to capture diversity of household balance sheets, finding consumption tends to grow more slowly among those with high debt levels
BIS paper examines impact of fiscal rules in Latin America
Authors note countries with rules with "wider coverage" and "supporting procedures" can be more stable; more widely, rules help them behave 'less procyclically'
IMF paper questions ‘visceral opposition’ to inflow controls
Guilty by association: controls on capital inflows “inextricably” linked to those on outflows, paper says; controls not “worse” or “costlier” than other policy tools
Debt repayment problems have ‘severe consequences’ on consumption, paper finds
Quarterly consumption 30% lower when debt repayment problems arise, research suggests, while recovery after the arrears is smaller than the initial decline