Central Banking
FDIC’s Hoenig warns on relaxing bank capital requirements
The Trump administration claims regulations hamper lending and economic growth, but Thomas Hoenig argues capital is an essential source of funding for banks
RBI makes first rate cut of 2017
Inflation is at a record low, and growth is forecast to rebound, although the RBI is still concerned about weak transmission of the policy rate
Sri Lanka issues first t-bonds under new transparent framework
Both maturities offered were oversubscribed in phase one, says central bank
Serbia’s Tabaković deems NPL action plan a success
Proportion of NPLs has fallen by 6% since 2015, says governor
UK economy vulnerable to consumption-led recession
Fragile consumer spending could take a toll on growth, former BoE officials warn, leaving the central bank with a tough job ahead
Stanley Fischer analyses the factors behind low real interest rates
The economist emphasises government policy uncertainty in the US regarding health care, regulation, taxes and trade, as well as higher savings and weak investment
Malaysia starts to feel effects of Fed rate hikes
Fed rate hike in June reversed flows into Malaysian financial markets, leading to an increase in yields, a deprecation of the ringgit and a fall in the stock market; Thailand appears less affected
Banks’ funding plans need ‘careful monitoring’, EBA says
Planned increase in MREL issuances in 2018–09 may cause problems, report warns
UK banking sector faces higher costs after Brexit, report warns
Banks intend to minimise initial impact of Brexit in operations, but may be forced to move more personnel over time to maintain proximity to clients
Fed’s Brainard says US is ‘falling short’ in diversifying economics
Federal Reserve Board governor highlights the benefits of diversifying the economics profession, urging students to consider a career before “shutting the door”
Banks not ‘boring’ before Glass-Steagall repeal, New York Fed economist says
There is little evidence of an explosion in non-traditional activity after Glass-Steagall was dropped, despite the conventional narrative, economist says
Tax cuts should focus on income from capital, French paper argues
Cutting taxation on labour is less effective in boosting growth, researchers say
BoE workers walk out over continuing pay dispute
Workers launch first of three days of strike action amid complaint over fairness of pay awards, with possibility of further escalation
People: RBI deputy retires; Paraguay elects new board member
RBI reshuffles responsibilities as deputy retires; Paraguay elects new board member; FCA launches new role in Scotland
HKMA’s investment team “on guard” for turbulence later in the year
HKMA deputy chief executive warns of an undercurrent of market uncertainties in the second half of the year, after fund made record returns in the first half
QE could create balance sheet problems – Irish deputy governor
Eurozone’s asset purchase programme increases the interest rate risk for central banks, Donnery and co-authors write
Weaker franc gives SNB newfound leeway
The central bank may be able to slow or halt its massive foreign exchange acquisitions as the Swiss franc hits its lowest level against the euro since January 2015
Future of renminbi looks bright – Swift
The proportion of international payments denominated in renminbi falls to less than 2%, but the number of institutions using the currency increases
EU money fund rule threatens negative rates management tool
Constant net asset value funds may have to change format during prolonged spells of negative rates
US taxes low by global standards, say Chicago Fed economists
Overall burden of taxes is low by OECD standards, and taxes on capital income are notably lower than in Germany, economists say
IMF explores ways to increase profitability of Italy’s banking sector
Italian banks have operated in a low-growth environment since early 1990s; eurozone interest rates at record lows since global financial crisis
PNG governor stands firm on independence from government
Bakani hits back at claims institution has become a “puppet”, noting his appointment was confirmed after “rigorous scrutiny”
Swedish GDP growth beats forecast, adding to bank’s concerns
Inflation remains below the 2% target, despite lower unemployment, leaving the Riksbank reluctant to change course and raise rates before the summer of 2018
Central banks must exit asset purchase programmes with care, paper finds
Bundesbank paper uses model of eurozone to judge effects of asset purchases