Research
John Taylor calls for international policy co-ordination
Paper published today by the BIS says recent unusual monetary policies have been appropriate and benign - and international co-ordination could lead to an international co-operative equilibrium
EU members are ‘growing apart' not growing together, paper finds
Researchers examine EU member states' ‘dynamic convergence' and find seven separate groups of countries that are not converging with one another
ECB working paper says sovereign spreads driven by fundamentals
Paper finds that before the crisis, eurozone sovereign spreads were somewhat decoupled from fundamentals, but since then, country-specific factors have played a bigger role than regional contagion
Monetary transmission not to blame for weak bank lending in Brazil, IMF paper finds
Fewer loans due to shift in demand and possibly rapid expansion of state bank credit; if anything, sensitivity of lending to Selic rate changes seems to have increased, according to author
Credit ratings hit prices 'significantly' more in times of crisis, paper finds
Effects of rating actions on market prices not crucial during favourable market conditions but 'very significant' in times of crisis; analysis covers ratings and prices of 16,500 bonds over 12 years
Government intervention shielded Korea from global credit crunch
Paper by Bank of Korea and IMF economists argues external buffers such as foreign reserves and swap agreements means the country is in good shape to weather global financial turmoil
ECB working paper finds indebted countries should pursue austerity at ZLB
Model seeks to incorporate effects of government debt when examining how to tackle a liquidity trap at the zero lower bound
Italian paper finds government spending multipliers less than 1 at ZLB
The multiplier can go above 1 only when monetary policy is held constant for at least five years - but can still be reduced by elevated sovereign risk, researchers find
RBA economists examine effects of price shock on ‘endogenous reserves'
When a small open economy depends on non-renewable resources to a large degree, the effects of a shock to the prices of those resources are amplified, paper finds
Russian interbank market lacks discipline, Bofit paper finds
Investigation into levels of market discipline in the Russian interbank market finds some discipline was present during the financial crisis, but even then it was insufficient to curb risk-taking
Interest rates best transmit South African monetary policy, say researchers
New Sarb paper analyses five transmission channels for a monetary policy shock, finding interest rates to be the strongest, and asset prices the weakest
Chicago Fed paper aims to explain asset fluctuations through ‘unified' model
Framework draws on two theories of the role of credit in asset price fluctuations; study is first step in larger project
New Zealand bond yields are determined globally, paper finds
Global factors are the dominant determinant of New Zealand 10-year bond yields, but shorter term borrowing depends much more on local factors, according to a new working paper
OTC derivatives turnover driven by 'non-dealer' contracts, says BIS
Article in latest BIS quarterly review notes share of inter-dealer trades shrunk to 35% in 2013; trading remains concentrated in major financial centres despite 'rapid' growth in EM currencies
Link between ECB liquidity ops and interbank repo breaks down in crisis
Researchers at the New York Fed find that the relationship between ECB monetary policy operations and interbank borrowing did not survive the collapse of Lehman Brothers and associated crisis
Unexpected increases in Fed funds rate prompt gold prices to rise
Atlanta Fed working paper examining futures data between 1998-2008 finds that unexpected changes in the Fed's monetary policy can influence commodity prices
Financial crisis hit Australian inventories, paper finds
RBA researcher tests theory that tight credit conditions caused Australian companies to reduce their inventories, and includes a case study on the automotive industry supporting the hypothesis
Basel capital ratios lost credibility during crisis - Atlanta Fed paper investigates
Working paper says reliance of the Basel standards on overstated asset values in reported equity capital caused capital adequacy ratios to lose credibility with financial markets
Financial literacy in France is correlated with political engagement, study finds
Working paper finds middle-aged men are the most financially literate demographic; little difference between different political orientations, but the disengaged score worse on the test
Uncertainty constrains credit supply, IMF paper finds
Working paper tests the theory that uncertainty would reduce the supply of loans in an economy, and finds it holds true - especially for smaller credit institutions
Eurozone household debt varies based on institutions, paper finds
Repossession periods are the strongest single determinant of the distribution of secured debt in different member states of the eurozone, with fewer borrowers where repossession periods are longer
ECB paper says global economy still haunted by ‘spectre of protectionism’
Researchers at the European Central Bank find evidence that countries still regress to trade protectionism in the face of recessions or loss of competitiveness; call for international peer pressure
Swiss paper dissects asset price responses to economic news
Researchers find the relationship between asset prices and economic news is shaped by the prevailing economic conditions – including policy rates and perception of risk
Irish governor backs domestic and export banking separation
Patrick Honohan says that, by keeping the export and domestic banking sectors separate in small countries, authorities can avoid having to put a cap on the size of banks’ balance sheets