Central Banking
BoE’s new MPC members disagree on future path of hikes
New deputy Dave Ramsden sees current degree of slack to be too great to warrant removal of stimulus, while Tenreyro believes it cannot “persist for too long”
Williams: weak productivity, population growth keep rates low
The “new normal” implies a federal funds rate at 2.5%, says San Francisco’s John Williams
Basel Committee in ‘last few metres’ of post-crisis marathon
Secretary-general says it would be unwise to quit with the finish line so close, but adds the committee won’t be running another marathon for a while
FSB members press ahead with new cyber-risk rules
Over 70% of FSB members say they plan to launch new measures in the next year; private sector emphasises need for better training
US Treasury hands CCP resolution powers to FDIC
Mnuchin regulatory review explicitly refers to FDIC as receiver under a Title II resolution
People: FSB appoints new secretary-general
ADB’s East Asia department and International Association of Deposit Insurers also gain new heads
Fintech is the future – Menon
Central bankers weigh in on potential of fintech, agreeing there is a need to separate use cases from the hype
Colombian banking sector not at risk despite homogeneity – paper
Economist examines diversity of Colombian banking sector and notes “distance” between banks is low; lending and funding portfolios are most similar, author says
Philippines central bank seeks to allay concerns on FDI slowdown
Foreign direct investment into the Philippines dropped 37.9% in the year to July; government is struggling to meet ambitious growth targets
Moldovan parliament expands central bank’s supervisory powers
Major bank crime saw theft of approximately 12% of GDP in 2014
Riksbank simulates a payments crisis scenario
Central bank deems offline payments and withdrawals a suitable alternative to credit cards
PBoC targets stability ahead of party congress
China's central bank has taken several measures to boost stability in the run-up to the Communist party congress, which starts on October 18
Blanchard and Summers call for rethink of stabilisation policy
Both economists question consensus on fiscal prudence and advocate stricter financial regulation
BoE paper sheds light on global policy transmission
Comparison of UK and Hong Kong based on bank-level data finds evidence of both portfolio and funding effects
Fed’s Powell: normalisation will be ‘manageable’ for emerging markets
Fed governor says current capital flows appear to be in line with fundamentals; corporate debts a vulnerability but “situation is not alarming”
ECB strongly criticises Slovenian draft law on central bank
Proposals would put legal burden of proof in banking crisis cases on central bank, ECB says
Bank of Lithuania bans banks from virtual currency activities
Lithuanian financial firms must disassociate themselves from virtual currencies, says central bank, warning licences may be revoked
Birr plunges 15% as Ethiopia devalues currency
Move aims to tackle “severe” forex shortage; IMF recommends higher interest rates and more flexible exchange rate
FOMC split over inflation forecasts, minutes show
Participants expressed concern that low inflation this year might reflect not only transitory factors
London-based banks face ECB Brexit power grab
Drive to supervise swaps books from Frankfurt threatens cross-border balance sheet management
IMF cautions global vulnerabilities put growth at risk
Fund calls central banks to provide needed monetary support while tackling underlying threats
Bahamian central bank proposes law change to cap government debt holdings
New legal framework for Bahamas central bank would enforce “comprehensive” limits on government debt; holdings of long-term government debt stand at 12.52%
Emerging market incomes continue to grow despite trade impacts – Lagarde
Trade has not impacted emerging markets as negatively as their advanced counterparts, Lagarde says, as incomes continue to grow
BoE introduces new counterfeit initiative for ‘front line of defence’
New checking scheme will employ “targeted training” for cash handlers while retailers will help central bank gather data on current practices