Central Banking
Bank of Mexico hikes following Trump election shock
Peso hit hard by Donald Trump's election victory, with possible US fiscal expansion and Fed rate hike likely to draw more capital from emerging markets, central bank says
Yellen defends Dodd-Frank and Fed independence to US Congress
Act has made a “very significant contribution” to US financial stability, Fed chair says
European supervisors publish new anti-money laundering guidelines
Some firms concerned over national supervisors’ ability to regulate money laundering risks
Financial globalisation only good within limits, says Canada’s Lane
Timothy Lane flags the dangers of an open capital account for some countries, saying monetary policy in some countries may be “overwhelmed”
CCP default risks not correlated, CFTC finds
Timothy Massad: stress tests reveal “quite a bit of diversification” in CCP exposures
BoE’s Cunliffe: central banks not causing low natural rates
Quantitative easing has not caused rates to fall, but is rather responding to a low natural rate, deputy says; the fall in sterling could require deviation of the policy rate from the natural rate
Some way to go for renminbi as reserve currency – Bundesbank's Thiele
Chinese investment markets should be opened up to foreign investors, Thiele says
Central banks should sacrifice some independence – Harvard economists
A group including the UK’s Ed Balls says central banks are losing legitimacy; handing over some “political independence” could reverse the trend without damaging policy outcomes
Market forces drive deleveraging as well as regulation – Caruana
BIS chief says markets are forcing discipline on banks, although he concedes regulation is playing a role as well; discussion participants point to tensions in regulatory framework
St Louis Fed chief says election has not changed near-term outlook
Bullard hints at support for “single policy rate increase”; says changes to fiscal and regulatory regimes likely from 2017 and to immigration and trade policy in longer term
Fischer: liquidity is mostly adequate but there are problem areas
Fed vice-chair recommends vigilance amid changing market structure, though he says problems are not widespread; SEC chief says she is “deeply concerned” on bond market liquidity
BoJ economists seek best escape route from liquidity traps
Some policies are more effective than others, but a combination can generate stronger effects, researchers find
Bank of Italy publishes unconventional monetary policy papers
Papers and presentations cover models and data on unconventional programmes
Riksbank considering e-krona issuance – Skingsley
Cash use is declining, but people still need access to central bank money, raising the need for a central bank digital currency; design challenges remain, says deputy governor
MAS launches blockchain experiment
Central bank to build a proof-of-concept model to conduct interbank payments; second phase could include foreign currency transactions
ECB sets out protection scheme monitoring guidelines
Central bank aims to harmonise national practices across eurozone
Paper examines relationship between monetary policy and bank funding crises
Current regulatory tools are not sufficient to contain bank runs, Canadian working paper suggests, underscoring the importance of policy measures such as reserve requirements
Head of Securities and Exchange Commission to step down in January
Mary Jo White says the agency has brought about “fundamental reforms”; the future direction of US financial regulation is unclear following divergent statements from Trump
Lowe stresses the importance of financial buffers
“Skimping” on buffers is not worth the risk, says RBA governor, stressing stronger ones promote stability and prosperity
Emerging markets hit harder by US rate hikes than domestic policy – Bank of Korea paper
US rate hikes have a larger impact on growth and financial flows in emerging markets than changes in domestic policy, researchers find
MAS awards prizes for fintech innovation
Three fintech companies receive S$50,000 for ideas presented at inaugural fintech festival
BIS’s Shin links dollar strength to global malaise
Head of research outlines how dollar strength affects leverage globally, causing deviations from covered interest parity and potentially impacting growth and trade
Carney faces grilling from parliament in wake of tenure decision
Regardless of Brexit timetable, BoE governor will leave on June 30, 2019; he warns firms could trigger plans to leave London in late 2017 if Brexit deal proves unsatisfactory
EU places sanctions on new Syrian central bank governor
Duraid Durgham placed under asset freeze and travel ban due to “support for Syrian regime”; Syrian currency under severe pressure from war and sanctions