Central Banking
RBI paper analyses exchange rate volatility transmission
Working paper assesses spillover of exchange rate volatility from international currencies to Indian rupee; finds volatility is dependent on foreign exchange rates and domestic policies
Caruana says central bank credibility ‘must not be squandered’
BIS secretary general says reliance on central banks to provide extraordinary monetary policy to prop up the financial system is causing dangerous distortions; credibility may be ‘squandered’
BIS calls for European banking union and urgent fiscal reform in developed nations
Urgent fiscal reform and genuine efforts to create a banking union in Europe are vital to breaking the viscous linkage between banking and sovereign stress, says BIS
ECB relaxes collateral eligibility rules
Broader range of lower quality assets now acceptable under ECB collateral rules; move should help Spanish banks after results of stress test reveal a potential €62 billion capital shortfall
New York Fed appoints new head of markets group
Simon Potter named as chief of markets group and manager of the System Open Markets Account; begins new role on June 30
Brazil and China agree currency swap and deepen cooperation
Central Bank of Brazil announces agreement with China Banking Regulatory Commission to enhance exchange of information; governments agree to currency swap
Canada may withdraw monetary stimulus if growth remains on track, says Carney
Mark Carney lauds Canadian economy, says Europe must create a common banking union and believes global recovery relies on moving to an open, multi-polar international economy
Czech National Bank paper studies changing inflation dynamics
Working paper examines causes of changing inflation dynamics in central Europe; finds inflation expectations play a 'substantial role' in price stability
Bank of Finland paper assesses impact of eurozone crisis response
Discussion paper considers the effect of initiatives in response to the eurozone crisis on countries’ sovereign debt; finds some policy decisions had 'significant' short-term effect on bond markets
BoE’s Weale discusses monetary policy challenges
Martin Weale paints bleak picture of the global economy; says new Bank of England schemes should help to support the recovery
Fed paper examines balanced budget rules
Working paper considers whether balanced budget rules affect spending at different levels of government; finds rules impose discipline on the states but have little impact on federal spending
Bank of England to post collateral in OTC derivatives trades
BoE thought to be the first major central bank to change policy on collateralisation as it seeks to reduce dealer funding charges
Bank boards have little time to focus on business risk, says Scotiabank chief
Canadian bank chief believes pressing need to meet raft of new regulations means top bankers have little time to focus on business risks; says ‘small’ and ‘uncomplicated’ banks fail too
Hungary proposes amendments to troublesome central bank law
Hungarian government puts forward amendments to widely criticised central bank law; discussions with concerned international bodies including the ECB and IMF are 'ongoing'
ESRB encourages cooperation to fight market deterioration
European Systemic Risk Board sets out areas authorities must focus on; Ewald Nowotny announced as newest steering committee member
Sri Lankan central bank blasts rating agency assessment
Central bank expresses 'grave concern' over statement from Standard & Poor's regarding state of banking sector in the country; rating agency noted 'very high risk' in institutional framework
Bernanke says Fed ready for QE3 if necessary
Fed chairman explains FOMC decision to maintain rates and extend Operation Twist; says Fed is ready to make more asset purchases if necessary
Central Bank of Kuwait revamps bank governance rules
New rules make improvements to regulations in light of global financial crisis and recent issuances from Basel Committee and Financial Stability Board; effective date set for next year
Reserve Bank of India's governor defends policy stance
Duvvuri Subbarao responds to critics of the RBI’s tight monetary policy; says central bank’s actions are justified despite supply shocks and slowing growth
IMF paper assesses impact of financial sector size
Working paper examines the effect on growth of varying sizes of financial sectors; finds that above a certain threshold, financial sectors have a negative impact on growth
BoE’s Jenkins discusses threats to financial system
Financial Policy Committee member considers dangers facing the global financial system; says future interventions to stabilise cross-border capital flows are likely
Fed extends Operation Twist to end of 2012
Federal Open Market Committee to continue programme to lengthen average maturity of its holdings of securities; target range for federal funds rate maintained at 0-0.25%
Lagarde welcomes additional IMF funding
Christine Lagarde praises countries pledging additional $456 billion to the IMF; says funds will only be used as a “second line of defence”
ECB paper models endogenous credit risk
Working paper discusses models of credit risk; authors argue that “feedback effects” have major implications for regulatory reform