Central Banking
Lebanese banking sector holding up, despite Syria crisis – central bank
The banking sector remains liquid and well capitalised despite a “strained” Lebanese economy, the central bank says; new compliance unit formed
Financial integration enables EMs to improve trade integration – paper
BoE paper sheds light on relationship between foreign direct investment and international trade, highlighting the “substantial” economic effects for emerging markets
Technology driving inequality in advanced economies – IMF
Technology plays “dominant role” in explaining falling labour share of income in advanced economies, study finds; globalisation more important for emerging markets
UK competition authority approves VocaLink sale
Decision clears way for MasterCard to acquire the provider of UK payments infrastructure, after the firms offer concessions
HKMA investing in digital currency prototype
HKMA continues to build on its DLT research through digital currency venture with commercial banks; previous projects show potential to improve efficiency and transparency
Central banks eye gold amid global uncertainty
Rising inflation and the unclear impact of Trump administration policies may lead reserve managers to view gold – and inflation-linked bonds – more favourably
IMF paper examines impact of China’s new growth model on sub-Saharan Africa
Chinese rebalancing does not have to negatively affect sub-Saharan Africa, paper says; high commodity prices were not the “determining factor” behind region’s strong growth
Kashkari rejects Dimon’s claims on too big to fail
Minneapolis Fed chief rebuts assertion by JP Morgan CEO that US banks are no longer too big to fail; says capital is too low, not too high
Congress urged to curb Fed’s regulatory powers
House hearing revives the debate on consolidating US regulatory agencies
BBC claims ‘secret recording’ implicates BoE in Libor scandal
Phone conversation transcript suggests government and Bank of England put pressure on Barclays to lower its Libor submission
Mexico’s Carstens calls for continued trade cooperation with the US
Protectionist policies would be a step backward for both nations, Bank of Mexico governor suggests, saying continued cooperation will foster employment and investment
PRA and FCA to investigate Barclays’ chief executive
Jes Staley comes under fire for undermining whistleblowing regime after he sought to identify a whistleblower; board to impose “very significant” cut to bonus
Ukraine’s Gontareva to step down
NBU governor says her mission is complete, resigning three years into a seven-year term amid intense pressure
Conservative monetary policy raises banking fragility – paper
Researchers apply a ‘central bank conservatism’ index to data from 73 countries
ECB bond-buying has had ‘significant’ impact on Bund market
The impact of PSPP purchases is substantially higher in stressed markets – Bundesbank paper
Esma calls for greater powers over national supervisors
Supervisor also wants the authority to pause the application of some rules
Sarb will take ‘defensive posture’ to debt downgrade, says Ballim
South Africa’s central bank is unlikely to respond to country’s junk debt status unless rand volatility starts to affect prices; Fitch joins S&P in downgrading country’s sovereign debt
Brexit will be ‘litmus test’ for global system – Carney
Global financial system has reached “fork in the road”, says Bank of England governor; UK financial firms told to submit robust set of Brexit contingency plans by July
FOMC mulls ‘predictable’ balance sheet wind-down
One FOMC member says a “minimum pace” should be set for the reduction in mortgage-backed securities; committee will inform the public about its future plans for the balance sheet when the time comes
Book notes: Architects of the Euro, edited by Kenneth Dyson and Ivo Maes
This biographical study of the 10 key players in the development of the Economic and Monetary Union provides a contrast to more historical analyses
New paper examines central bank digital currency models
Bank of Canada experiment proves distributed ledger networks can be used to settle payments; paper examines the difference between retail and wholesale models
Czech National Bank abandons koruna floor
The central bank is likely to be happy with the market’s reaction, analyst says
Draghi and Praet say ECB will continue with QE
Praet says interest rates should remain low “past the horizon of our net asset purchases”
RBNZ paper develops ‘intuitive and reliable’ output gap measure
Authors turn to a “Beveridge-Nelson filter” to produce an output gap estimate that performs better than those produced by other filtering techniques