Central Banking
Signs of ‘de-anchoring’ inflation expectations in eurozone – ECB paper
Study finds professional forecasts are paying more attention to ECB inflation projections and less to the target; authors suggest “extensive use of forward guidance” could help
Inflation to fluctuate around bottom of target range, Botswanan report says
Mid-term review paints optimistic picture for inflation in Botswana; loose monetary conditions to contribute to growth in economic activity
King calls for IMF revamp
Former BoE governor suggests replacing IMF’s executive board with International Monetary and Financial Committee; notes fund may have strayed too far into political territory
Book notes: The power of a single number, by Philipp Lepenies
Lepenies offers a brief but very readable treatment of GDP's political history, drawing out some important lessons in the process
Bank of Zambia begins liquidating three financial institutions
Commercial Leasing Zambia, Cetzam Financial Services and Genesis Finance to close with immediate effect; those affected have 30 days to file objection to the courts
Unconventional monetary policy should be supported on structural and fiscal fronts – ECB paper
Authors examine the effects of supply- and demand-side policies; results point to “positive synergies” between policies
Anticipation effects can make lower bound a self-fulfilling prophecy – BoJ paper
New Keynesian model implies an economy can be drawn on to the zero lower bound more quickly when people expect it; negative rates have only a small impact on duration
Economic outcomes will “vindicate” central bank – Malawi governor
Chuka asks the private sector to “trust” the central bank in its policy decisions; a reduced debt-to-GDP ratio and an end to drought should see inflation fall, he says
Property prices closing in on pre-crisis levels – BIS statistics
Statistics for the first quarter show advanced economy prices approaching levels last seen before the financial crisis, but emerging markets see a dip; research links house prices to credit conditions
RBI launches bond market shake-up
Host of measures aim to develop markets, increase participation and improve liquidity in Indian capital markets, following review by former deputy governor Harun Khan
Capping interest rates could affect credit, says Kenyan president
Kenyan President approves new banking law despite acknowledging future “difficulties”; government to monitor possible emergence of “unregulated” and “informal” lending mechanisms
UBS teams up with other major banks in blockchain venture
‘Utility settlement coin’ to be backed by cash held at central banks; team of experts will keep an “open dialogue” with the banks and regulators throughout the testing process
Frontier markets need framework to strengthen capital flow resilience – IMF paper
Frontier markets are affected by capital flows in similar ways to emerging markets, the paper argues, suggesting a change in the “landscape” of capital flows could have policy implications
Central Bank of Iceland changes course with 50bp cut
Reversal of tightening cycle reflects concern inflation is not rising as expected, in part because of the strength of the króna; growth still forecast to continue above trend
RBI’s Mundra hopes to boost credit to small businesses
Deputy governor outlines “ABCD” of issues affecting small businesses’ ability to access credit, including better access to information and new forms of collateral
Tightening policy during slowdown is not ideal, but necessary – Sarb governor
More fiscal or monetary stimulus will not generate growth in South Africa, says Kganyago, who instead stresses inflation outcomes need to be lowered
MAS unveils ‘Looking Glass’ fintech lab
New facility in MAS building was built as a space for fintech firms to test ideas with each other and the central bank; facility will also serve as venue for training and networking
Gibraltar to launch polymer £100 note
New note will be the first polymer banknote for Gibraltar; De La Rue to use ‘Safeguard’ substrate for new banknote, which will be issued “soon”
Canadian working paper examines effect of downward nominal wage rigidity on wage growth
Average wage growth higher due to DNWR after recession, authors note; signs of heterogeneity in DNWR effects
People: Irish market supervisor quits; Emefiele appointed president of AACB
Gareth Murphy resigns as head of market supervision at the Central Bank of Ireland, Nigerian governor appointed president of African Association of Central Banks, and more
Economists add to theory and empirics of economy’s non-linear dynamics
Paper by Bank of England economists finds “strong evidence” of non-linearity in UK data, while Markus Brunnermeier and Yuliy Sannikov expand theory of financial amplification mechanisms
Sarb governor stresses need for cooperative approach against cyber risk
New legislation will give central bank power over financial stability; now is the time for financial industry to become “proactive” in fostering “healthier” cyber culture, says Kganyago
Overhaul of Federal Reserve structure is needed, paper says
Former adviser to Bernanke co-authors paper stressing need to end private control of 12 regional Fed banks; diversity and transparency need improvement, authors argue
RBNZ’s Wheeler stands by inflation targeting
Despite a host of challenges for central banks, flexible inflation targeting remains the “most appropriate” framework for New Zealand’s monetary policy, governor says