Central Banking
Carney and BoE chief economist clash on inflation targeting
Bank of England governor-elect Mark Carney suggests inflation target could be sacrificed for nominal GDP goal; Spencer Dale questions whether this would be effective or viable
FSB presses forward with legal entity identifiers
Latest Financial Stability Board report shows further progress towards implementing the global legal entity identifier system with March 2013 deadline fast approaching
QE ‘relief’ no substitute for deleveraging, says HKMA’s Chan
HKMA chief executive warns asset price growth must be supported by structural developments
Central Bank of Ireland to toughen penalties for financial crime
Irish central bank looks to harden sanctions for financial crime, including doubling maximum fines and the possibility of criminal prosecution for top managers
Belize paper evaluates value of currency peg
Research published by the Central Bank of Belize highlights export growth and steady domestic inflation aided by peg to the US dollar
Central Bank of West African States boosts growth estimates
Monetary policy committee praises member states’ investment in agriculture and infrastructure; holds benchmark interest rate
Bundesbank paper calls for inclusion of endogenous liquidity in accounts
Researchers suggest including endogenous liquidity in mark-to-market portfolio valuations as a method of mitigating risk
BIS research identifies ways to smooth the financial cycle
Bank for International Settlements working paper designs model of financial cycles and examines the difficulties of reducing the size of their peaks and troughs
New Zealand’s new capital standards at odds with Australia on ‘bail-in’
Reserve Bank of New Zealand’s new capital standards conform to Basel III requirements but concerns raised on how bail-in debt rules will tally with Australia
BoE and FDIC co-operate on bail-in plans
US deposit insurer and UK central bank release plans for resolution of global systemically important banks, focusing on a ‘top-down’ approach to maintain viability long enough for restructuring
Riksbank evaluates OTC derivatives market ahead of new rules
Members of the Riksbank’s financial stability department examine how participants in the OTC derivatives market are preparing for new European rules on risk management and transparency
Central bank policies fuel asset price rise, says BIS
BIS quarterly review says monetary easing is helping to push investors into riskier assets despite a weakening global outlook.
EBA finds distortion in e-money practices across EU
Electronic payments market in Europe distorted by differing interpretations of EU anti-money laundering and counter-terrorist financing directives by member states, according to new EBA report
RBI’s Sharma urges euro area rebalance
Reserve Bank of India executive director says current account imbalances are ‘inherently unsustainable’; periphery countries must pursue greater productivity and competitiveness
BoJ paper finds noisy reference rate can create volatility
Working paper studies effect of reference rates on stabilising or destabilising interbank markets; finds noise in rates reported by large banks can feed volatility and impair monetary policy
Malawian paper considers impact of output gap on inflation
Research published by Reserve Bank of Malawi uses three different measures to estimate output gap; finds only a weak link between business cycle and inflation
Bank of Mauritius chief calls for curb on ‘fishy’ banks
Rundheersing Bheenick says new guidelines on corporate governance and separation of international and domestic banking will help prevent ‘global infection’
FSA outlines plans for Libor reform
Regulator will directly oversee calculation of benchmark rate; could also compel banks to submit Libor fixings
Bundesbank at odds with new IMF position on capital controls
Board member says capital controls should be last resort, if used at all; follows updated IMF guidance that capital controls can have ‘substantial benefits’ when used properly
Hungarian governor slams government’s economic policies
András Simor says economic recovery in Hungary will require fiscal discipline, higher bank lending and price stability – and the government is failing at all three
Dallas goes mobile with financial education
The Federal Reserve Bank of Dallas launches a mobile app designed to help people manage their money
PMA annual report shows economic mismatch between Gaza and West Bank
Palestine Monetary Authority says growth in Gaza Strip ran four times faster than in the West Bank in 2011, but economic gap between regions persists
Canadian research finds net liquidity boost from central clearing
Bank of Canada working paper finds small liquidity increase from use of centrally cleared derivatives
Romanian governor dedicates Polish award to his forerunners
National Bank of Romania’s Mugur Isărescu receives Order of Merit from Poland for his contribution to the countries’ co-operation; reflects on Romania’s war-time assistance