Central Banking
Payments changing fast but cash still in demand – Riksbank survey
Telephone survey finds cash use declining and mobile payments on the rise, though demand for paper money not likely to disappear any time soon
Carney will remain at BoE until 2019
BoE governor chooses to extend term at central bank an additional year amid intense speculation as to his future, though he stops short of a full eight years
Brexit may not lead to ‘new dominant location’ for European finance – Irish governor
Regulatory considerations should not drive firms’ location decisions, Lane argues
Carney’s decision is bigger than one man’s career
Politicians in the UK have already harmed perceptions of the Bank of England’s independence through a sustained attack on its governor, Mark Carney. His decision to stay or go will have wide ramifications
Obstacles may worsen for Russian and Turkish financial reformers, Italian paper says
Reforms in both countries left key problems unaddressed, researchers say
Ugandan governor emphasises banking system is sound
Tumusiime-Mutebile steps in to calm investors, dismissing negative reports following the acquisition of Crane Bank; banking system is “stable, sound and profitable”, he says
‘Overoptimism’ a factor in house price bubbles, Danish paper finds
Authors highlight how sentiment can become “decoupled” from economic fundamentals under certain circumstances
Renminbi drops to six-year low
Figures from Safe show a net $44.7 billion worth of payments in the currency left China in November
Dominican Republic central bank hikes despite falling inflation
Central bank action comes as economy grows more than expected, although inflation is well below target; US factors prove a concern
People: Ukraine promotes Smolii to first deputy governor and appoints two new deputies
Banking supervision chief and human resources head join central bank’s board
Draghi and Mersch seek to calm German fears
The ECB’s task will be harder if Germans feel discriminated against, Mersch says; Draghi points to evidence that QE helped German savers
Banks not fully adapted to new prudential environment – BoE deputy
Firms need a “proper chance” to adapt to the “new world”, says Woods, warning that the banking system still looks fragile on some metrics, despite work by his predecessor, Andrew Bailey
Hedging demand can cause covered interest parity violations – BIS paper
US dollar forward hedging demand can cause covered interest parity to fail even when markets are calm, authors say, helping explain this post-2012 anomaly
Ukrainian central bank council holds first meeting
New body has extensive powers over monetary policy and governance; NBU cuts rates for the fifth consecutive time this year
Brazil’s inflation forecasts send mixed messages for monetary policy
‘Market’ forecast suggests there is a limit to monetary easing, central bank minutes show, though ‘reference’ scenario indicates room for more easing
HKMA expands offshore renminbi liquidity scheme
List of banks provided with liquidity for offshore renminbi market-making grows, with extra measures designed to boost transparency
Central Bank of Curaçao and Sint Maarten files anti-corruption raid complaint
Central bank questions legal basis for raid and seizure of documents; investigation into alleged tax avoidance by governor Emsley Tromp continues
Ukrainian central bank attacks leading law-maker as political dispute worsens
Central bank governor backed by the ‘reform council’ and the IMF, but the president’s stance unclear
Global crises raise need for digital financial inclusion – BIS’s Caruana
Refugee crisis, climate change, banking challenges and cyber crime all point to the need for better inclusion through the use of technology, says BIS chief
IMF amends SDR calculation method
Exchange rates used to calculate SDR to be obtained from a commercial provider by the Bank of England, in effort to make methodology more “robust”
Lagarde welcomes ‘major policy shift’ in Saudi Arabia
IMF managing director says efforts to reduce reliance on oil are “very welcome”, although Gulf countries more generally need to continue their fiscal adjustment
Commodity prices create ‘strong pressure’ to lower interest rates – paper
Policy response to commodity price fluctuations has been stronger in the US, paper finds; commodity price shocks follow two cycles, with the most recent having impacts on policy rates
RBS issues first polymer banknotes
Polymer note printed on De La Rue ‘Safeguard’ substrate is first in RBS's new series; Scottish novelist and poet Nan Shepherd features on the front of the note
Riksbank signals low rates will stay longer
Swedish central bank says rates likely to remain on hold for longer than planned, with chance of an inter-meeting asset-purchase extension