Central Banking
Irish governor says senior creditors must take share of losses
Patrick Honohan wants the losses of failing banks to be shared with senior creditors; says governments’ rescue options are limited when debt is socialised
Hungary rejects leaked conditions for IMF programme
Viktor Orbán says Hungary will not comply with requirements for IMF-EU programme; leaked list includes elimination of controversial transaction tax applied to National Bank of Hungary
Swiss franc expected to retrace its fall as ECB news sinks in
The euro rallied against the Swiss franc for the first time in six months after yesterday’s announcement of new measures from the ECB, but FX strategists expect it to fall back towards 1.20
New Zealand’s Bollard reveals next move
Outgoing governor of the Reserve Bank of New Zealand announces his next job; leaves central bank after 10 years as chief
IMF paper analyses China’s trade impact on Europe
Working paper investigates links between trading competitiveness in China and the EMU; finds different results for euro periphery and core countries
Swiss board member supports counter-cyclical capital buffer
Jean-Pierre Danthine examines impact of CCB on Switzerland’s financial sector; says it would have mitigated property crisis in 1990s
Fed paper dissects link between asset purchases and bond yields
San Francisco Fed working paper explores the relationship between the Fed’s asset purchases and international bond yields; says portfolio balance was a key link between the two
Filipino governor reveals domestic liquidity problem
Amando Tetangco discusses deposit and loan growth rates in the Philippines; expresses concern over excess domestic liquidity
Bundesbank starts foreign reserve operations in Tokyo
German central bank upgrades Tokyo representative office on 25th anniversary to full trading office; starts trading in Asian timezone to lower costs and gain information edge
ECB unveils details of bond purchase plans
Mario Draghi sets out plans for European Central Bank to buy debt of ailing eurozone economies; questions remain over impact
BoE keeps monetary policy steady
Bank of England holds interest rate and leaves QE programme at previous level; asset purchases expected to be complete in two months’ time
Sarb reveals details of new banknotes
South African Reserve Bank initiates national campaign about introduction of new banknotes; currency bearing image of Nelson Mandela will be in circulation by end of year
Norway releases coin to mark anniversary of suffrage
Norges Bank issues special edition coin on 100th anniversary of introduction of voting rights for women; competition winner designed reverse of coin
Central Bank of Iceland minutes show rate-hold hesitancy
Minutes of the monetary policy committee’s August meeting detail dispute over interest rate; members discuss impact of currency depreciation
India’s Subbarao demands ‘radical change’ in banks’ risk management
Reserve Bank of India governor calls for a change in Indian banks’ approach to risk; says it is not just a matter of compliance for banks
Shirakawa calls for increase in Japan’s potential for growth
Bank of Japan governor says monetary easing has created accommodative financial conditions; calls for private sector to take advantage
Italian paper studies impact of euro break-up fears
Bank of Italy working paper investigates interest rate movements away from macroeconomic fundamentals; suggests euro break-up fears may be an influence
Tributes to the governor that never was (Andrew Crockett, 1943-2012)
Bank of England, BIS and IMF heads pay respects to policymaker Andrew Crockett, who died this week. Crockett described as the governor ‘that never was’ and the ‘midwife’ to the HKMA
Kenya central bank slashes rates as others hold ahead of ECB decision
Positive developments in economy lead Kenyan central bank to make large rate cut as central banks in Australia, Canada, Israel, Thailand and Poland all keep rates on hold ahead of ECB decision
HKMA moves to improve retail payments system
Hong Kong unveils a three-pronged approach to improve payments system; targets transfers denominated in renminbi as well as the Hong Kong dollar
RBA paper addresses systemic risk in payments system
Research paper from Reserve Bank of Australia analyses systemic risk in RTGS payment system; evaluates Australia’s liquidity-saving algorithms
Central banks are major driver of gold prices, says GFMS
Latest Thomson Reuters GFMS gold survey finds central banks are supporting gold prices via large purchases; adverse economic climate and quantitative easing also contributing to price increase
Public policy signals can be beneficial, says BIS paper
Bank for International Settlements study models effect of policy signals on prices and market outcomes; takes into account market response
Pakistan develops five-year Islamic finance plan
State Bank of Pakistan’s Kazi Abdul Muktadir praises the growth of the Islamic finance industry; outlines new operational frameworks